Key witness in trial of FTX founder Sam Bankman-Fried seeks no prison time at upcoming sentencing
NEW YORK — Caroline Ellison, former CEO at FTX founder Sam Bankman-Fried of the collapsed cryptocurrency empire and his former girlfriend, is not seeking a prison sentence at her sentencing later this month.
Attorneys for Ellison made the request shortly before midnight Tuesday in a document filed in federal court in Manhattan ahead of a sentencing scheduled for Sept. 24.
The lawyers pointed to her direct and extensive cooperation with U.S. authorities when FTX and related companies went bankrupt in November 2022, and noted that the court’s probation department recommended that she not serve a prison sentence.
Ellison, 29, pleaded guilty to the charges nearly two years ago and testified against Bankman-Fried for nearly three days during his trial last November. After his beliefBankman-Fried was sentenced to 25 years in prison. Without her cooperation, Ellison could have faced decades in prison.
“Caroline blames no one but herself for what she did,” the lawyers wrote. “She deeply regrets her role and will carry shame and remorse to her grave.”
In their arguments at the hearing, the attorneys spoke at length about Ellison’s on-again, off-again relationship with Bankman-Fried, which lasted several years.
They said the relationship and her appointment as CEO of Alameda Research, FTX’s hedge fund subsidiary, contributed to her committing crimes under Bankman-Fried’s leadership.
She testified at trial that she had reported widespread fraud against her employees even before FTX filed for bankruptcy in November 2022.
She explained to them that FTX investors’ money was being improperly used to cover billions of dollars Bankman-Fried lost on investments, or wasted on charitable donations, political contributions and purchases that funded his lavish lifestyle.
In early December 2022, she fully cooperated with federal prosecutors and disclosed information about Bankman-Fried’s actions that directly led to a number of charges filed against him in the weeks that followed, the lawyers wrote.
“Over time, Caroline’s moral compass became distorted,” the lawyers said. “At Mr. Bankman-Fried’s direction, she took actions she knew were wrong, allowing him to steal billions. She lived in fear, knowing that a catastrophic collapse was likely, but fearing that untangling herself would only hasten that collapse.
“When FTX eventually collapsedCaroline felt intense sadness for all the people she had betrayed, but also enormous relief, because she no longer had to lie and steal for Mr. Bankman-Fried,” they added.
Since testifying in the Bankman-Fried trial, Ellison has continued to be troubled by her behavior, despite doing charity work, writing a novel and working with her parents on a math textbook for advanced high school students, her lawyers said.
“She has been effectively unemployed in the short term due to the notoriety resulting from this case, and the damage to her reputation is unlikely to abate any time soon,” they said. “Caroline was not motivated by greed and took no steps to profit personally at the expense of clients.”
She is now in a healthy romantic relationship and has reconnected with high school friends she lost touch with after working for Bankman-Fried from 2017 to November 2022, court documents show.
In addition, her lawyers said, she is in the process of finalizing agreements with the government, the FTX debtors, and a comprehensive settlement in the FTX-related multidistrict lawsuit, which she expects will leave her with nothing of what she earned while working at Alameda.
Prosecutors were expected to file their arguments before the verdict.