Caroline Ellison served as CEO of Alameda Research — the quantitative trading firm and hedge fund co-founded by Sam Bankman-Fried (SBF) — and played a central role in the FTX fraud that defrauded customers of approximately $8 billion; after the November 2022 collapse of FTX, Ellison cooperated with federal investigators, pleaded guilty to seven counts of wire fraud and conspiracy, testified against SBF in his October 2023 criminal trial, and was sentenced in September 2024 to two years in federal prison (well below the 110-year maximum), with credit for her substantial cooperation.
Background
Caroline Ellison (born 1994) grew up in Newton, Massachusetts, the daughter of two MIT economics professors. She studied mathematics at Stanford University, graduating in 2016, and joined Jane Street Capital as a quantitative trader — one of SBF’s earlier employers. She met Sam Bankman-Fried at Jane Street and joined Alameda Research in 2018.
Career at Alameda Research
Alameda Research was established in 2017 as a crypto quantitative trading firm. Originally SBF’s primary vehicle, by 2021 it had grown into a fund managing billions in crypto assets. Ellison served as co-CEO alongside Sam Trabucco from 2021 to mid-2022, then as sole CEO from August 2022 until the November 2022 collapse.
Court documents revealed that Ellison knew — and in some cases directed — the use of FTX customer funds at Alameda to cover losses, repay loans from Genesis and other lenders, fund political donations, and purchase real estate. She drafted spreadsheets, presented to SBF’s inner circle, showing the full scope of FTX customer loans to Alameda.
FTX Collapse and Cooperation
In November 2022, after CoinDesk published reporting revealing Alameda’s balance sheet was largely composed of FTT (FTX’s exchange token), a bank run began on FTX. Within days FTX, Alameda, and ~130 affiliated entities filed for bankruptcy. Binance CEO Changpeng Zhao (CZ) publicly canceled a proposed acquisition deal.
On December 19, 2022, Ellison was arrested and pleaded guilty to seven federal counts, entering into a cooperation agreement with the Department of Justice. She testified in SBF’s October 2023 criminal trial, providing detailed accounts of how Alameda used FTX customer funds without authorization. Her testimony was considered pivotal in the prosecution.
Sentencing
On September 24, 2024, Judge Lewis Kaplan sentenced Ellison to two years in federal prison, noting her “extraordinary cooperation” with the government as the key mitigating factor against a recommended guideline sentence of more than a decade. She was also ordered to forfeit approximately $11 billion.
Key Dates
- 2016 — Graduates Stanford, joins Jane Street Capital as a quantitative trader.
- 2018 — Joins Alameda Research.
- 2021 — Named co-CEO of Alameda Research (alongside Sam Trabucco).
- August 2022 — Becomes sole CEO of Alameda Research.
- November 2022 — FTX collapses. Ellison flies to the Bahamas; FTX files for bankruptcy.
- December 19, 2022 — Pleads guilty to seven federal counts; enters cooperation agreement with DOJ.
- October 2023 — Testifies as government’s key witness in SBF trial; SBF convicted on all seven counts.
- September 24, 2024 — Sentenced to two years in federal prison.
Common Misconceptions
- “Ellison was unaware of the misuse of customer funds.” — Court testimony and documents indicate she was directly involved in and aware of the transfer of customer assets from FTX to Alameda.
- “Her cooperation guarantees a lenient sentence.” — She still received a two-year prison term, though substantially reduced from the potential maximum due to cooperation.
Last updated: 2026-04