Caroline Ellison, the former CEO of Alameda Research, reached a settlement in a lawsuit filed by the FTX bankruptcy estate whereby she will forfeit all her remaining assets. In the legal filing dated October 7, 2024, Ellison reached an agreement to return assets not already forfeited to the government or used to cover certain legal fees. The settlement is a crucial step in efforts to recover money after the cryptocurrency exchange FTX collapsed amid scandal. Terms of the Settlement
Ellison’s settlement includes the transfer of her remaining assets, including any equity or ownership rights she may have over the cryptocurrency assets. FTX’s bankruptcy estate seeks to claw back over $30 million in equity and bonus payments she received between December 2020 and February 2022. The effort is part of an intense legal strategy put in place to try and recover funds lost during the heady decline of FTX.
FTX filed for bankruptcy in November 2022, amidst a wide array of allegations that spanned fraud to mismanagement of finance. The exchange and its sister company Alameda Research stood at the very center of one of the largest financial scandals in crypto history.
Cooperation with Investigations
Her settlement agreement states that Ellison shall fully cooperate with ongoing investigations related to the collapse of FTX. So far, such cooperation by her has been critical in establishing the complete extent of the fraudulent activities relating to the exchange. The settlement memorandum emphatically asserts that continued cooperation on the part of Ellison will be of major benefit to the debtors of FTX and will contribute information that may not be available to the litigation.
Penalty to Ellison
Ellison was sentenced in September 2024 to two years in prison over the FTX fraud case. This sentence was considered rather light compared to that of Bankman-Fried, who received 25 years-a founder and Ellison’s testimony against him became key in laying down substantial testimony and evidence in assembling the case against him and finally unveiling the full breadth of his fraudulent acts.
While Ellison’s sentence may be little more than nonexistent, the fines are substantial: He will have to forfeit $11 billion in assets related to charges of fraud and money laundering.
