Caroline Ellison, the former head of Alameda Research, has been sentenced to two years in prison for her involvement in one of the largest financial frauds in U.S. history, related to the collapse of the cryptocurrency exchange FTX.

Ellison’s Role in the FTX Collapse

Caroline Ellison was CEO of Alameda Research from 2021 to 2022, when FTX was valued at $32 billion. Despite knowing the financial issues within the company, Ellison remained silent, which contributed to the misuse of FTX customer funds. She pleaded guilty to seven felony charges, including fraud and conspiracy.

Cooperation and Testimony Against Sam Bankman-Fried

Ellison's testimony was crucial in securing the conviction of Sam Bankman-Fried, the founder of FTX. She provided detailed accounts of the mismanagement of funds, which were instrumental in the prosecution's case. Ellison met with prosecutors around 20 times, helping them build their case against Bankman-Fried, who is currently serving a 25-year prison sentence.

A Fine Line Between Guilt and Cooperation

Despite the defense's arguments and the Probation Department's recommendations, the judge ruled that Ellison's cooperation did not absolve her of responsibility for her involvement in the major fraud. In his decision, the judge noted that while Ellison expressed remorse and her help was valuable, it wasn't enough for full freedom from punishment.

Although sentenced to two years, Ellison may be eligible for early release for good behavior. Her cooperation was recognized as pivotal in unveiling the FTX case. She now plans to engage in volunteer work and write a math textbook.