FTX CRYPTO EXCHANGE FOUNDER'S EX-CONFIDANTE SENTENCED TO TWO YEARS

NEW YORK, Sept 25 (Bernama-dpa) -- Caroline Ellison, a former confidante of FTX crypto exchange founder Sam Bankman-Fried who played a key role in his conviction, has been sentenced to two years in prison, reported German news agency (dpa). 

The former chief executive of hedge fund Alameda Research had hoped to avoid prison. 

Judge Lewis Kaplan said a suspended sentence alone would not have been a sufficient deterrent for others, but cited her "very, very substantial" cooperation in handing out the sentence.

Ellison, 29, had pleaded guilty to two counts of conspiracy to commit wire fraud, two counts of wire fraud and one count of conspiracy to commit money laundering, each of which carry a maximum sentence of 20 years in prison. She had also pleaded guilty to a range of other charges.

Bankman-Fried was sentenced to 25 years in prison for fraud in March. He is appealing the decision.

Ellison was one of Bankman-Fried's closest associates – and was, therefore, able to provide investigators with incriminating insider information. The two had been a couple at times.

FTX, one of the largest trading centres for cryptocurrencies such as Bitcoin, collapsed spectacularly at the end of 2022. Bankman-Fried was captured in the Bahamas and extradited to the US. 

While the cryptocurrency business can be complicated, Bankman-Fried was ultimately charged with classic fraud: embezzlement of client assets. 

Ellison was the head of Alameda Research, a hedge fund which made risky transactions and borrowed funds from FTX when collateral should in fact have been deposited, but emphasised that Bankman-Fried was ultimately in charge. 

A secret workaround in the computer system allowed Alameda to go as far into the red as it wanted with FTX. When the fund's trades went wrong, it created a multibillion-dollar hole in FTX's coffers.

-- BERNAMA-dpa