Topline

Former crypto bigwig Caroline Ellison received a jail sentence Tuesday for the financial crimes committed alongside her ex-boyfriend Sam Bankman-Fried, landing time behind bars despite some legal experts suggesting Ellison may skirt jail time for her extensive cooperation against Bankman-Fried, the former billionaire head of the $32 billion cryptocurrency exchange FTX.

Key Facts

Was Caroline Ellison Expected To Get Prison Time?

Prosecutors last week indicated they supported a more lenient sentence for Ellison due to her “extraordinary cooperation,” without sharing a recommended sentence, while Ellison’s attorneys have put forth three years of supervised release and no prison time. Several legal experts said it was a real possibility Ellison could avoid a prison sentence. Former Assistant U.S. Attorney Kevin J. O’Brien told CNBC supervised release may be a “a “fair sentence” considering her help in nailing the “elusive” Bankman-Fried. Fellow former federal prosecutor Rebecca Mermelstein told the Washington Post that Ellison could avoid prison due to the government’s belief she “deserves a lot of credit” for her flip against Bankman-Fried. Joshua Naftalis, another former federal prosecutor, told Business Insider it’s "typical though not guaranteed" for a star witness like Ellison to avoid prison.

Crucial Quote

“I would tell her to be less risk-averse and believe in herself more," Ellison wrote in a 2021 application for Forbes’ 30 Under 30 list in a prompt asking for her advice to her younger self.

Key Background

Considered one of the most significant white-collar crimes in U.S. history, the Alameda and FTX fraudulent scheme was unearthed beginning in Nov. 2022 as it was revealed that executives at the closely related firms greenlit the illicit transfer of FTX customer funds to cover Alameda’s trading losses. Ellison and the 32-year-old Bankman-Fried first met in 2015 at quantitative trading firm Jane Street, and later dated on-and-off from 2020 to 2022. “Caroline Ellison and Sam Bankman-Fried schemed to…prop up the value of their house of cards," Securities and Exchange Commission Chairman Gary Gensler asserted in 2022.

Further Reading

ForbesThe Collapse Of FTX