Former Alameda CEO Caroline Ellison Seeks No Prison Time, Citing Extensive Cooperation in FTX Case

Caroline Ellison, the former CEO of Alameda Research and key figure in the FTX cryptocurrency exchange collapse, is seeking no prison time as her sentencing date approaches. In a filing submitted late Tuesday to the U.S. District Court for the Southern District of New York, Ellison’s attorneys argued for a sentence of time served with three years of supervised release, citing her extensive cooperation with authorities and the Probation Department’s recommendation.

Ellison, who pleaded guilty to seven felony counts related to FTX’s downfall in December 2022, provided crucial testimony against her former boss and ex-boyfriend, Sam Bankman-Fried, during his trial last year. Bankman-Fried was subsequently convicted on all seven charges he faced and sentenced to 25 years in prison.

The sentencing memorandum highlights Ellison’s swift return to the United States from FTX’s Bahamas headquarters and her voluntary cooperation with the U.S. attorney’s office and financial regulators. Her lawyers argue that this cooperation was instrumental in helping authorities understand the intricacies of FTX’s collapse and recover assets for creditors.

John J. Ray III, the current CEO overseeing FTX’s bankruptcy proceedings, stated in a letter that Ellison’s assistance was “valuable” in helping his team recover “hundreds of millions of dollars in Debtor assets for the benefit of creditors.”

The filing also delves into Ellison’s personal history and her relationship with Bankman-Fried, describing it as complex and contentious. Her attorneys argue that this relationship, combined with her role at Alameda Research, contributed to her involvement in the crimes directed by Bankman-Fried.

Ellison’s lawyers emphasize that she “poses no risk of recidivism and presents no threat to public safety,” arguing that leniency would “promote respect for the law” given her early disclosure of the crimes and acceptance of responsibility.

The sentencing hearing is scheduled for September 24, 2024, at 3:00 p.m. EDT. As the date approaches, the cryptocurrency industry and legal observers are closely watching to see how the court will weigh Ellison’s cooperation against the severity of the charges she faces.

This case continues to send ripples through the fintech and cryptocurrency sectors, serving as a stark reminder of the need for robust oversight and ethical practices in the rapidly evolving digital asset landscape.