Caroline Ellison seeks no jail for role in FTX collapse due to cooperation Caroline Ellison seeks no jail for role in FTX collapse due to cooperation
Caroline Ellison asks for leniency in FTX trial, points to her extensive cooperation with the authorities.
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Updated: Sep. 11, 2024 at 12:57 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Caroline Ellison, former co-CEO of Alameda Research, has requested no jail time for her role in the FTX collapse, according to a Sept. 10 court filing.
Her legal team argued that her sentence should be limited to time served, followed by supervised release, because of her extensive cooperation with the authorities during Sam Bankman-Fried’s trial.
Further, the lawyers noted that the Probation Department recommended a time-served sentence and three years of supervised release.
They stated:
“The Probation Department recommends a sentence of time served with three years of supervised release. The PSR grounds this recommendation in Caroline’s extraordinary cooperation with the government, her otherwise unblemished record, and the numerous testimonials of Caroline’s honesty and ethical behavior both before she started working at Alameda and since she left Alameda.”
The defense also argued that Ellison poses no risk of repeating her offenses and is not a threat to public safety. They claimed that her early admission of guilt, full responsibility, and extensive cooperation warrant leniency and respect for the law.
Ellison’s cooperation
The court filing also contained statements from her former colleagues, friends, and family, illustrating how Ellison’s helpfulness aided the US authorities’ case against the incarcerated founder of the defunct crypto exchange.
Notably, John J. Ray III, the CEO overseeing FTX’s bankruptcy estate, credited Ellison’s assistance as “valuable” in stabilizing the exchange during its collapse. He said her cooperation helped his team protect and preserve “hundreds of millions of dollars in Debtor assets” to benefit creditors and understand FTX’s systems.
Meanwhile, attorneys representing class action lawsuits against FTX executives praised her contributions to recovering creditor funds.
Robert Cleary, the court-appointed examiner, echoed similar sentiments in his brief remarks about Ellison’s helpfulness.
Additionally, the lawyers pointed out that excerpts from Ellison’s diary provide insights into her mindset while at Alameda. They also noted that her romantic feelings for him complicated her work relationship with Bankman-Fried.
Ellison’s sentencing is set for Sept. 24, 2024.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Caroline Ellison is the former lead trader and former CEO at Alameda Research.
John J Ray III is the Chief Restructuring Officer and now-appointed CEO of FTX, a cryptocurrency derivatives exchange.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.