Sam Bankman-Fried’s ex-girlfriend to do jail time for role in crypto fraud

Crypto criminal Sam Bankman-Fried’s ex-girlfriend is going to prison for helping him steal $8 billion in customer funds.

A woman who helped her ex-boyfriend steal $8 billion in customer funds has been sentenced to two years in prison.

Former cryptocurrency executive Caroline Ellison helped her ex Sam Bankman-Fried in the crime and pleaded guilty to seven counts of fraud and conspiracy Tuesday.

The 30-year-old MIT graduate, who ran the hedge fund tied to the digital currency trading platform FTX, was sentenced to two years in prison for her role in the crime.

She faced a maximum of 110 years but there was some leniency after she testified against Bankman-Fried in court, who was sentenced to 25 years in prison for the fraud which led to FTX’s sudden collapse in November 2022.

Caroline Ellison was sentenced to two years in prison for her role in the crime. Picture: Michael M. Santiago / Getty Images via AFP

Ellison was sentenced in Mahattan’s U.S. District Court by Judge Lewis A. Kaplan to 24 months in prison and was ordered to forfeit $11 billion for her involvement in the collapse of Bankman-Fried’s crypto exchange company, CNBC reported.

She held back tears and bowed her head slightly forward after the sentence was handed down.

“To make it literally a get out of jail free card is not something that I can my see my way clear to,” Kaplan said as Ellison stood, her hands clasped together in front of her, wearing a dark grey blazer over a maroon dress.

The judge called the FTX fraud, in which customers of the failed cryptocurrency exchange saw billions of dollars vanish in 2022 within days, one of the largest financial crimes in history.

Ellison’s lawyers has urged the judge for a“lenient” sentence on Ellison, who pleaded guilty to fraud charges and agreed to co-operate with police.

The judge pointed out the difference between Ellison and her ex-boyfriend. Picture: Michael M. Santiago / Getty Images via AFP

The judge drew a distinction between her and Bankman-Fried, who was sentenced to 25 years in prison after the judge found he did not show any remorse for his crimes.

“While you were gravely culpable in this fraud, there is no doubt that you had remarkable co-operation,” Judge Kaplan said.

“That’s a fundamental distinction between you and Mr Bankman-Fried.

Ellison, a Boston native, had served as the head of Alameda Research, the hedge fund that Bankman-Fried owned, and had been his on-and-off girlfriend in the years before his crypto empire crumbled, according to trial testimony.

Ellison’s lawyers claimed that Bankman-Fried forced her into a ‘sort-of isolation’ that resulted in her moral compass becoming “warped”.

They claimed that at his direction, she helped steal billions while “living in dread, knowing that a disastrous collapse was likely, but fearing that disentangling herself would only hasten that collapse.”

Her romantic involvement with Bankman-Fried further complicated the pair’s working relationship.

Ellison’s lawyers claimed that her ex-boyfriend convinced her to stay with him by telling her that he loved her and that she was essential to the business’ survival “while also “while also perversely demonstrating that he considered her not good enough to be seen in public with him at high-profile events.”

Sam Bankman-Fried, co-founder and chief executive officer of FTX, in 2022. Picture: Lam Yik/Bloomberg

Before its collapse in 2022, FTX was one of the world’s most popular cryptocurrency exchanges and rose to fame after its Washington lobbying campaign and their Super Bowl commercial.

Bankman-Fried and other top executives in the company were accused of stealing funds from customer accounts in order to make risky investments, buy luxury real estate in the Caribbean, make millions of dollars in illegal political donations and bribe Chinese officials.

At his trial, prosecutors said Bankman-Fried “crossed a line” when he spoke to The New York Times about his ex-girlfriend, saying it amounted to witness intimidation.

Ellison was described by The Times as its star witness. Bankman-Fried allegedly had more than 100 calls with one of the paper’s reporters, and was accused of “intending to portray a key cooperator testifying against him in a poor and inculpatory light”, according to a letter filed on July 28, 2023, by the Department of Justice.

It added Bankman-Fried’s comments were akin to “improperly influencing those prospective jurors and intimidating a witness and sending a message to other prospective witnesses”.

“Witness tampering is not constitutionally protected speech.”

Responding to the decision, Bankman-Fried’s lawyers said the government’s position flouted the First Amendment and that returning him to jail would mar his ability to mount a defence.

-With the New York Post

Originally published as Sam Bankman-Fried’s ex-girlfriend to do jail time for role in crypto fraud