Sam Bankman-Fried’s Ex Faced Mind-Blowing Prison Term Over FTX Collapse

Caroline Ellison, the ex-girlfriend of fallen crypto billionaire Sam Bankman-Fried, could have gone to prison for a mind-blowing term of 110 years over her role in the collapse of their crypto exchange firm, FTX.

However, she took a plea deal and started cooperating with the prosecution, court documents have revealed. 

She Turned on Her Ex Big Time 

FTX, which had a valuation of $32 billion, collapsed within a matter of days in November over doubts about its liquidity and solvency, as did its sister exchange, Alameda Research. 

Ellison, a former CEO of the Alameda hedge fund, pleaded guilty to several federal fraud charges, her plea agreement reveals, as cited by The New York Post. 

The document, which was filed by US Attorney for New York’s Southern District, reveals the charges could have brought the 28-year-old Stanford math graduate a stupefying 110-year jail sentence. 

The agreement also discloses that not only Ellison, but also Gary Wang, FTX’s other co-founder, has agreed on a plea deal and will also cooperate with the federal investigators.

Both Ellison and Wang will probably “get much lighter sentences,” due to their cooperation with the feds, according to the report, a development likely spelling big trouble for Sam Bankman-Fried himself.

Even so, experts – such as Ira Lee Sorking, a former layer of fraudster Bernie Madoff – caution it is impossible to predict Ellison’s sentence at the present stage.

SBF’s ex may serve no prison time at all – according to former US prosecutor Moira Penza. She could walk away with only a probation sentence.

Penza said Ellison was “truly remorseful” and “taking responsibility” for her actions. In addition, her potential trial testimony against Sam Bankman-Fried could be a tremendous factor in slashing what would have otherwise been a hefty sentence.

Her Bail is 1,000 Times Smaller Than His 

The leading cause of the FTX collapse, which was brought about by a spike in client withdrawals, is considered to be the way SBF channeled investors’ money from the crypto exchange to finance his Alameda hedge fund. 

Because of that, by the summer of 2022, Alameda already owed $8 billion to FTX’s customers. 

Bankman-Fried’s former girlfriend played an essential role in the scheme. This is why she got slapped with multiple charges – including money laundering, wire fraud, securities fraud, and commodities fraud. 

As she agreed to cooperate with the feds, though, prosecutors let Ellison out on a bail of only $250,000. This is 1,000 times smaller than SBF’s $250 million, a record-breaking bond. 

After he was extradited to the US from the Bahamas, the fallen former crypto-billionaire has been on house arrest at his parents’ house, wearing an ankle monitor. 

Under her plea agreement, Ellison had to give up her travel documents and is not allowed to leave the continental US. 

The report predicts the sentence for the former Alameda hedge fund CEO won’t be revealed until the end of Bankman-Fried’s trial; federal prosecution deals typically aren’t disclosed until they have been fulfilled. 

The plea document does make it clear that Ellison would still be sued for financial damages and faces a separate US federal government lawsuit.

Her plea deal, however, has proven right the experts who predicted she would turn on her former boyfriend to save her own skin in the gigantic fraud-induced collapse of the FTX crypto exchange.

This article appeared in The State Today and has been published here with permission.

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