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Caroline Ellison, former CEO of Alameda Research, has agreed to turn over all her remaining assets to FTX debtors to settle a lawsuit filed against her by the bankruptcy estate.
Settlement Agreement
In an Oct. 7 filing, it was stated that FTX and Caroline Ellison have reached a settlement deal. This agreement requires Ellison to return all her remaining assets “not otherwise forfeited to the government or used to pay certain eligible legal fees.”
Asset Transfer and Equity Rights
Aside from returning her remaining assets, Ellison has also agreed to transfer any equity and ownership rights that she holds over cryptocurrency assets. This move is aimed at recovering approximately $30 million in the form of equity and bonus payments received by Ellison from the firm between December 2020 and February 2022.
Background of FTX Bankruptcy
FTX went bankrupt in November 2022. The company’s downfall was plagued by accusations of fraud and mismanagement directed at both the exchange and its sister company, Alameda Research.
Cooperation with Investigations
As part of her agreement with FTX, Caroline Ellison has committed to cooperate extensively with debtors in the ongoing investigations into the collapse of the firm.
“Ellison has also committed to cooperating with the Debtors in ongoing investigations and litigation—a benefit that the Debtors would not be able to obtain even if they prevailed at trial against Ellison.”
Legal Consequences
In September 2024, Ellison was sentenced to two years in prison by District Judge Lewis A. Kaplan for her involvement in the FTX crypto fraud case. Her relatively light sentence, especially compared to FTX founder Sam Bankman-Fried’s 25-year sentence, raised many eyebrows.
It was revealed in court that Ellison received a lighter sentence due to her early guilty plea and her cooperation, which was crucial in uncovering the extent of Bankman-Fried’s crimes.
Despite her assistance in the case, Ellison still faces forfeiture of around $11 billion on fraud and money laundering charges.
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