Former Alameda Research CEO, Caroline Ellison just got sentenced to two years in Jail.
This is significantly low, considering how Bankman-Fried, her former boss got 25 years in prison.
Ellison and Bankman-Fried were both ordered to forfeit $11 billion to the court.
In an interesting twist of events, SBF and controversial hip-hop mogul Diddy now share the same cell block.
The outcomes of the ongoing cases will determine what happens next.
The crypto industry crossed another milestone when it comes to closure this week.
Caroline Ellison, the former CEO of Alameda Research has just been sentenced to two years in prison.
This final judgment comes around two years after the collapse of FTX (then one of the biggest CEXs in the world) and its sister firm, Alameda.
Interestingly, Ellison’s sentence is much lighter than that of Bankman-Fried, her former boss.
It is also a lot less than the maximum penalty of more than a century behind bars.
Ellison’s stroke of luck comes largely because she cooperates with prosecutors and because of her role as a key witness against the FTX masterming.
Here are all the details:
Per Bloomberg, the sentence was handed down by Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York.
During the hearing, Kaplan commented on how Ellison’s testimony played a major role in the case against Bankman-Fried, who is currently serving a 25-year sentence for his role in how $8 billion in customer funds went down the drain.
“I’ve seen a lot of cooperators in 30 years,” Kaplan reportedly said “I’ve never seen one quite like Ms. Ellison.”
2 years in prison
Ellison, aged 29, expressed remorse for her actions and acknowledged the harm she caused to countless investors.
“Not a day goes by that I don’t think about all of the people I hurt,” she said in her statement to the people in court.
As part of her sentence, Ellison has also been ordered to forfeit a massive $11 billion.
Interestingly, this is the same amount Bankman-Fried was ordered to forfeit, considering the scale of the scandal In 2022.
Recall that FTX, once a shining light in the crypto space suddenly went bankrupt in one of the biggest implosions the industry has ever seen.
Ellison was charged with multiple offenses, including two counts of wire fraud, conspiracy to commit the same offense, as well as conspiracy to commit money laundering.
This is without mentioning the counts of commodities fraud and securities fraud.
All of these combined, carried a maximum sentence of up to 110 years.
However, in 2022, Ellison pivoted and struck a deal to serve as a witness in the ongoing investigation—in exchange for leniency, of course.
Through and through, while Ellison is serving a two-year sentence, Bankman-Fried, her former boss, is dealing with a much harsher fate.
SBF was sentenced to 25 years behind bars for coordinating the entire FTX saga.
He has since filed an appeal, claiming that he did not receive a fair trial, was presumed guilty by the media, and is serving an unfair sentence.
The legal process is ongoing and SBF might be able to win a lighter sentence as well soon.
In a semi-unrelated twist of fate, Bankman-Fried is now sharing the same jail unit with the disgraced hip-hop mogul, Sean “Diddy” Combs.
This came to light per reports from NBC, which stated that the duo are currently being held at the Metropolitan Detention Center in Brooklyn, New York.
These two now share a “barrack-style” living space with about 20 other inmates.
For context, Diddy, a Grammy-winning artist and entrepreneur was arrested earlier in September for charges relating to racketeering and sex trafficking.
Sharing the same cell block
The charges against Diddy stem from allegations that he forced women into participating in lavish "freak-off" parties. He also reportedly engaged in other criminal activities including forced labor, kidnapping, arson and bribery.
While Diddy awaits trial, his lawyer unsuccessfully attempted to secure a $50 bail—which means that he is now stuck with SBF, who continues to serve his 25-year sentence.
As more legal battles continue to unfold, Caroline Ellison’s relatively light sentence compared to other FTX executives, has raised concerns about the balance of justice.
Especially in white-collar crime cases.
While her cooperation helped prosecutors bring justice to her fellow execs, many victims of the scandal and other speculators believe that the two-year sentence doesn’t fully reflect the scale of her crimes.
While her cooperation undeniably aided the government’s prosecution of Bankman-Fried, many victims of the FTX collapse may feel that the punishment doesn’t fully reflect the scale of the financial harm caused.
Fractional CFO Lili Balfour, in a recent tweet, opined: “She falsified financial reports. She knew what she was doing. Why is America so soft on crime?”
Overall, the combination of financial fraud, personal scandals, and high-profile figures like Diddy adds one more layer of complexity to an already dramatic landscape.
The outcomes of Bankman-Fried’s appeal and Diddy’s court hearing will be closely watched by members and non-members of the crypto community, as some of the biggest legal cases of the year unfold.
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