Sam Bankman-Fried's ex-girlfriend Caroline Ellison sentenced

Caroline Ellison, the ex-girlfriend, employee and co-conspirator of convicted FTX founder and CEO Sam Bankman-Fried, was sentenced to 24 months in prison on Tuesday for her role in defrauding investors and customers of the cryptocurrency platform before its multi-billion dollar collapse.

U.S. District Judge Lewis Kaplan sentenced Ellison to two years in prison and three years' probation. Ellison was also ordered to pay a fine of approximately $7.11 billion.

Ellison, who was CEO of FTX sister company Alameda Research when FTX filed for bankruptcy in November 2022, previously pleaded guilty to two counts of wire fraud and five counts of conspiracy and agreed to cooperate with prosecutors.

She was the government's star witness in the trial of Bankman-Fried, who was sentenced to 25 years in prison earlier this year after being convicted on similar charges last November. Bankman-Fried maintains his innocence and has appealed both his conviction and sentence.

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Ellison could have faced up to 110 years in prison, but prosecutors had asked the judge to be lenient and even described her cooperation as “exemplary.” Her defense team asked the judge for no prison sentence and three years of supervised probation. She argued that she was instrumental in Bankman-Fried's conviction, not the main perpetrator of the crime, and that she was remorseful.

Sam Bankman-Fried, co-founder of FTX cryptocurrency derivatives exchange, leaves court in New York, USA, on Wednesday, July 26, 2023. (Photographer: Yuki Iwamura/Bloomberg via Getty Images / Getty Images)

Ryan Salame, another former high-ranking employee of FTX and its sister company Alameda Research who had cooperated with authorities, was sentenced to seven and a half years in prison earlier this year after pleading guilty to federal charges against him.

Former FTX and Alameda Research executive Ryan Salame is serving a 7.5-year prison sentence for his role in the collapse of the crypto empire. Bahamian authorities said he alerted them to alleged crimes before FTX went bankrupt. (Gillian Jones/Berkshire Eagle)

During Bankman-Fried's criminal trial, Ellison testified that she and other executives committed crimes at FTX and Alameda. Ellison blamed Bankman-Fried for her involvement in the alleged fraud.

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Ellison admitted that billions of dollars of FTX customer funds flowed to Alameda to be used for the hedge fund's investments and to repay its debts. The former Alameda CEO also admitted to sending fake financial statements to lenders on Bankman-Fried's instructions, which she said made the hedge fund appear less risky than it actually was.

FTX's collapse has been compared to that of Enron. The crypto exchange had merged assets with Alameda Research due to liquidity problems, leading to waves of customers withdrawing funds. Bankman-Fried was indicted the following month.

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FTX's bankruptcy proceedings indicate that victims will get all their money back, but at the value of November 2022, during the crypto winter.

FOX Business' Kelly O'Grady and Suzanne O'Halloran contributed to this report.