FTX Insider Caroline Ellison Sentenced to Two Years in Prison

The strength of Ellison’s testimony against Bankman-Fried also would have gone a long way in convincing a judge to show leniency, said Paul Tuchmann, a former United States attorney and partner at the law firm Wiggin and Dana.

Testifying at the Bankman-Fried trial in October 2023, Ellison cited his former affair as the cause of the FTX fraud. On the stand, he painted Bankman-Fried as powerful and calculating and explained to the judge his various deceptions, his careful maintenance of his public image, and his dangerous and dangerous relationships. Bankman-Fried was “absolutely free to take the risk, as long as she thought it was the expected value,” Ellison said, under cross-examination by the prosecutor. “He talked about being willing to take large tracts of coins, like a coin where if it comes up tails, you might lose $10 million, but if it comes up heads, you make more than $10 million.”

Ellison cried at the stop as she recalled her “state of terror,” filled with guilt over the stolen funds, and the paradoxical relief she felt when FTX began to collapse. “It was something that was on my mind every day, worrying about what would happen if the truth finally came out,” said Ellison. “I felt relieved that I no longer had to lie.”

“In cases like this, it’s usually very important for prosecutors to have someone close to the lead defendant who’s trying them, who can get the jury involved,” said Tuchmann. He was a very important witness in a very important case.”

The judge took that cooperation into account. “I have seen a lot of participants in 30 years. I’ve never seen anyone like Ms. Ellison,” said Kaplan. It was “remarkable” that there was “not a single instance” where Ellison’s testimony and interviews with law enforcement differed from the physical evidence at trial, he said.

Ellison’s expenses likely also contributed to the judge’s leniency. “This time, you had something close to torture [of Ellison] due to the very large number of publications of the case. “Then he had the reality that his personal and love life was exposed to the world — which would be painful for anyone,” said Tuchmann. “You can get a lot of credit if the cooperation has results. The results have been great.”

As Ellison prepares to begin his time behind bars, other members of FTX’s inner circle await their sentences. Former FTX executives Nishad Singh and Gary Wang, who both pleaded guilty to fraud charges, will be sentenced on October 30 and November 20, respectively.

Meanwhile, in an attempt to avoid a lengthy prison sentence, Bankman-Fried is seeking a retrial. “Sam Bankman-Fried has never been presumed innocent … The jury that presided over his case found him guilty,” his lawyers wrote in a filing with the US Court of Appeals. But the sentence is unlikely to be overturned, and the decision to fight the charges against him to the bitter end—unlike Ellison and other conspirators—may continue to prove futile.

“Kaplan is a highly respected judge, especially in difficult cases. Its short title—that he did everything wrong—is an argument that is very difficult to present,” said Naftalis. “The request is taking a long time.”

As people left the courtroom Tuesday, Ellison’s two younger sisters could be seen, but quietly, crying next to their parents. One of Ellison’s attorneys patted him on the back for comfort. Ellison didn’t move.

This is a developing story. Please check back for updates.

Additional reporting by Caroline Haskins.