A US federal judge in the Southern District of New York has sentenced Caroline Ellison, a member of the ring of executives who presided over the fraud that led to the collapse of crypto exchange FTX, to two years in prison. In addition, she has been ordered to forfeit $11 billion.

In December 2022, Ellison pleaded guilty to seven counts of fraud and conspiracy in connection with the fall of FTX. Last March, FTX founder Sam Bankman-Fried—with whom Ellison shared a tumultuous romantic relationship—was sentenced to 25 years in prison after being convicted of similar crimes at trial.

The exchange filed for bankruptcy in November 2022 after running dry of funds to process customer withdrawals. The money was missing, a jury found, because FTX insiders had conducted an elaborate fraud whereby billions of dollars in customer funds were swept into a sibling company, Alameda Research, headed by Ellison. Those funds were then used to bankroll high-risk trading, venture bets, debt repayments, personal loans, political donations, and a lavish life in the Bahamas.

Although a rise in the price of cryptocurrencies means FTX customers are expected to be paid back in full—if only based on the dollar-value of the assets in their FTX accounts at the time of the collapse—the funds remain locked up in the bankruptcy proceeding.

Ellison faced a theoretical maximum sentence of 110 years in prison. Before receiving her sentence, Ellison told the court of her regret for having become embroiled in the FTX fraud and the damage she had caused to customers. “My brain can’t even truly comprehend the scale of the harm I’ve caused,” she said, her voice quavering as she held back tears. “But that doesn’t mean I won’t try.”

In his own address, presiding judge Lewis Kaplan signaled his intent to show Ellison leniency. But such was the severity and extent of the fraud, he said, that Ellison must spend time behind bars. “For a case this serious,” he said, he couldn’t give out “a literal get-out-of-jail-free card.”

In a court filing in early September, Ellison’s legal counsel had petitioned the judge to refrain from sending her to prison, pointing to the extent of her cooperation with the investigation into FTX, the responsibility she had taken for her wrongdoing, and her obvious contrition.

The US Department of Justice later filed a letter in support. The DOJ stopped short of asking the judge to hand down a specific sentence—such is the convention in the Southern District of New York, former prosecutors say—but noted Ellison’s “extraordinary cooperation.”

“There is no formula, but [judges] often say they are trying to consider the person as a whole,” says Joshua Naftalis, a former US prosecutor and partner at the law firm Pallas Partners. The presentence filing sought, therefore, to place Ellison’s actions in the context of her complicated relationship with Bankman-Fried and make play of any potentially mitigating elements of her character and background. “What you are trying to impress upon the judge is that the person being sentenced is more than the crime they committed,” says Naftalis.

The potency of Ellison’s testimony against Bankman-Fried will also have gone a long way to convincing the judge to show leniency, says Paul Tuchmann, a former US prosecutor and partner at the law firm Wiggin and Dana.

Testifying at Bankman-Fried’s criminal trial in October 2023, Ellison depicted her former paramour as the driving force behind the FTX fraud. On the stand, she painted Bankman-Fried as forceful and calculating and described for the jury his various deceptions, the careful curation of his public image, and his warped relationship with risk. Bankman-Fried “was totally comfortable with taking a risk, as long as he thought it was a positive expected value,” said Ellison, under examination by the prosecution. “He talked about being willing to take large coin flips, like a coin flip where if it comes up tails, you might lose $10 million, but if it comes up heads, you make slightly more than $10 million.”

Ellison cried on the stand as she recalled her “state of dread,” racked with guilt about the stolen funds, and the perverse relief she felt when FTX began to crumble. “It’s something that had been on my mind every day, worrying about what would happen when the truth finally came out,” said Ellison. “I felt a sense of relief that I didn’t have to lie anymore.”

“In cases like this, it is usually so important to the prosecution to have someone who is close to the lead defendant you are trying, who can take the jury inside,” says Tuchmann. “She was an immensely valuable witness in an immensely important case.”

The judge took that cooperation into account. “I’ve seen a lot of cooperators in 30 years. I’ve never seen one like Ms. Ellison,” said Kaplan. It was “remarkable” that there was “not one instance” where Ellison’s testimony and interviews with law enforcement differed from the material evidence in the case, he said.

The cost to Ellison likely also played a role in the judge’s leniency. “In this case, you had what was close to harassment [of Ellison] because of the very large amount of press coverage of the case. Then you had the fact that her personal, romantic life was revealed to the world—which would be very painful for anybody,” says Tuchmann. “You can get more credit if the cooperation has consequences. The consequences to her were great.”

As Ellison prepares to begin her time behind bars, other members of the FTX inner circle await their own sentences. Former FTX executives Nishad Singh and Gary Wang, both of whom have pleaded guilty to fraud, will be sentenced on October 30 and November 20, respectively.

Meanwhile, in a bid to escape his own lengthy prison sentence, Bankman-Fried is pushing for a retrial. “Sam Bankman-Fried was never presumed innocent … He was presumed guilty by the judge who presided over his trial,” wrote his lawyers in a filing in the US Court of Appeals. But the chances of the conviction being overturned are slim, and the decision to fight the charges against him to the bitter end—in contrast to Ellison and the other coconspirators—may continue to prove an unfruitful one.

“Kaplan is a highly respected judge, particularly in complex white-collar cases. The theme of the brief—that he got it all wrong—is a very hard argument to make,” says Naftalis. “The appeal is a long shot.”

As people filed out of the courtroom on Tuesday, Ellison’s two younger sisters were visibly, but silently, crying next to their parents. One of Ellison’s lawyers touched her back to comfort her. Ellison didn’t move.

This is a developing story. Please check back for updates.

Additional reporting by Caroline Haskins.