Caroline Ellison Faces Sentencing for Role in FTX Collapse

By the time the day is over, Caroline Ellison will know her fate.

The former cryptocurrency executive is due to be sentenced Tuesday (Sept. 24) afternoon for her role in the $8 billion collapse of the FTX crypto exchange.

Ellison, who had headed sister company Alameda Research, has pleaded guilty to fraud and conspiracy, and testified against FTX founder Sam Bankman-Fried — her former boyfriend — at his trial for stealing billions in customers funds.

Bankman-Fried was convicted of fraud and other charges last year and sentenced to 25 years in prison. He is appealing the sentence.

Ellison, 29, meanwhile, has sought to avoid jail time. In a court filing earlier this month, her attorneys asked Judge Lewis Kaplan for a sentence of time served and supervised release, citing Ellison’s “extraordinary” cooperation with the prosecution.

“Caroline blames no one but herself for what she did. She regrets her role deeply and will carry shame and remorse to her grave,” the filing said.

A report Tuesday by the Wall Street Journal (WSJ) says prosecutors have acknowledged that proving Bankman-Fried’s guilt at trial would have been difficult without Ellison.

“The Government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment,” prosecutors wrote to the judge, per the WSJ report.

Ellison’s lawyers say she has continued to work with the government, providing the Justice Department with information on people who enabled the FTX fraud and others taking part in potential cryptocurrency-related crimes.

That report also points a sympathetic portrait of Ellison’s post-FTX/Alameda life, noting that she’s now dating a new boyfriend — another former FTX employee — and has spent the past year writing a romance novel and doing volunteer work.

She’s also collaborating with her parents on a math textbook aimed at advanced high school students. (Ellison’s parents are both professors, as are Bankman-Fried’s).

Meanwhile, Bankman-Fried recently asked for a new trial, arguing that Kaplan had hindered his defense. In a court filing, the one-time crypto wunderkind argued that “everyone rushed to judgment” after FTX’s implosion and that a “sentence first-verdict afterwards tsunami” prevented a fair court proceeding.

“When the government introduces evidence, defendants have the right to rebut that evidence and present their side of the story,” the filing said. “But none of that happened here.”

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