Sam Bankman-Fried and Caroline Ellison are facing hundreds of years in prison if found guilty of all charges. As per CNBC, SBF could get charged with 115 years in prison if convicted of all crimes. Moving on, Caroline Ellison is also facing around 110 years in prison. The latter pleaded guilty to all 7 charges she was accused of last week, including conspiracy, fraud, and money laundering.
Both SBF and Caroline were allegedly conspiring together and their cooperation led to the collapse of FTX. As mentioned before, Caroline, together with a close associate of SBF, pleaded guilty to all charges. Moreover, they decided to cooperate with the authorities and give as much information as possible in relation to SBF. If the latter is found guilty, he could spend his whole life in prison. As of right now, SBF was released on bail after agreeing to pay $250 million to be released. Until today, however, he has yet to pay his due. This is because he was released on a written promise that he will show up in court whenever needed. So, he is being trialed while free. As for Caroline, since she agreed to cooperate with the authorities, she might be let off with an easier sentence.
The Rabit Hole of FTX’s Operations
To begin with, CNBC reports that SBF is facing both civil and criminal charges. Other than the criminal charges, tens of investment firms and private investors have filed lawsuits for FTX. Originally, FTX’s collapse came after CZ Binance tweeted that the balance sheet of the company looked sketchy, implying that the exchange could be insolvent. After this tweet, Caroline Ellison, the head of Alameda Research, a sister company of FTX, commented on CZ’s tweet stating that she is happy to purchase all FTT tokens from Binance at a price under the value of FTT at the time. This caused panic and the price of FTT began to collapse. Shortly after, FTX halted all operations because they did not have the funds to back their users’ funds. Why? Because they were lending unlimited amounts of money to Alameda Research.
Just like that, a major cryptocurrency exchange like FTX crumbled to be worth $0. This was catastrophic for the crypto market and Bitcoin’s price. After authorities began investigating the case, they found out much more about FTX’s operations, including money laundering and fraud. We will keep updating the public as the story progresses.