Caroline Ellison's prison sentence!

See how long she got for her role in the collapse of FTX.

Author

Daniel Akpobare
September 25, 2024

GM Explorer,

Remember the FTX saga that shook the crypto world with its jaw-dropping levels of fraud and theft?

Well, justice is finally being served, and we couldn’t wait to fill you in on all the details, so stick with us!

Here’s what we got for you today:

  • 🚨 Caroline Ellison's prison sentence!

  • 🗣️ SEC Chair's blunt words for crypto industry!

  • 🧱 Around The Block: Bitcoin price target rises to $78K after Chinese stimulus package.

🚨 Caroline Ellison's Prison Sentence!

Caroline Ellison, the former co-CEO of Alameda Research—and yes, Sam Bankman-Fried’s ex—is now heading to prison for two years for her role in the explosive collapse of FTX.

If you’ve been following this saga, you know it’s one of the biggest crypto disasters that left investors and consumers reeling.

Last December, Ellison pled guilty to a laundry list of serious charges, including wire fraud, conspiracy to commit commodities and securities fraud, and money laundering.

But here’s the thing:

Not only is she facing time behind bars, but she also has to forfeit a jaw-dropping $11 billion. Yep, that’s “billion” with a “b”!

However, thanks to her cooperation with the government, she’ll be serving her sentence in a minimum-security facility—so it’s not exactly Alcatraz.

Ellison didn’t shy away from taking responsibility, either.

She stood before the court and apologized, stating that not a day goes by without thinking about the people she hurt.

But let’s be real—what really saved her skin was her cooperation in taking down Sam Bankman-Fried.

She essentially sang like a canary in court, making it clear that Sam was the mastermind behind the whole scheme while she was just following orders.

Sam, of course, denied everything, but her testimony definitely worked in her favor.

Her attorneys had hoped she’d avoid jail entirely, especially since the federal Probation Department recommended just time served along with three years of supervised release.

But, as you might have guessed, that didn’t quite fly.

The judge, Judge Lewis Kaplan, wasn't having it. While he acknowledged her cooperation, he also noted that the sheer scale of FTX's collapse and the billions lost meant that accountability was a must.

As for Sam Bankman-Fried, he’s staring down nearly 25 years in prison—a harsher fate for his role in this disaster.

While Ellison has become a cautionary tale of how things can go horribly wrong when you get tangled up in one of the biggest financial scandals in recent history.

Other FTX executives, Gary Wang, and Nishad Singh, are also in the hot seat but are hoping their cooperation with prosecutors will save them from severe penalties.

We’ll find out soon enough their fates are up next, with Wang’s sentencing set for November and Singh’s in October.

One thing’s for sure: with billions lost and trust shattered, the fallout from FTX is far from over.

If you need more info, just click here!

🗣️ SEC Chair's Blunt Words for Crypto Industry!

Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), has strong words for the cryptocurrency industry.

In a recent statement, he says the industry is "rife with fraud and hucksters."

According to Gensler, many investors around the world have “lost too much money” because crypto firms refuse to follow the laws the SEC is in charge of enforcing.

And unfortunately, the crypto industry has recently seen high-profile cases of fraud.

In March, Sam Bankman-Fried, the founder of FTX, was handed a 25-year jail term for stealing billions of dollars from customers.

Again, in April, Changpeng Zhao, the founder of Binance, got four months in prison for allowing criminals, child abusers, and terrorists to launder money on his platform.

Gensler argues that such incidents undermine the trust of everyday investors in the capital markets despite crypto's relatively small share in the US and worldwide global markets.

But that's not all!

He also accuses crypto firms of failing to adhere to long-standing rules meant to protect retail investors from unscrupulous actors seeking public funding.

However, it seems the crypto community does not agree with him!

Some believe that every industry, including Wall Street, is also rife with hucksters and grifters, so Gensler's claims are baseless.

In fact, they argue that it’s the SEC’s job to address these issues; rather, they keep asking, "What is security?"

And they stood by while FTX happened and rarely pursued actual scam coins and rug pulls in the industry.

Phew - The tension between the SEC and the crypto community seems far from over.

🧱 Around The Block

That's all we've got for you today.

Did we miss anything? Or just want to say hey? We'd love to hear from you! You can

And If you haven't already, make sure to sign up to receive the next issue in your inbox.

Catch you soon.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions.

Reply

or to participate.