Caroline Ellison ‘deserves leniency’ for her part in FTX fraud

Caroline Ellison has urged a federal judge not to send her to jail after the former cryptocurrency executive helped prosecutors to win a jail sentence for her former boyfriend Sam Bankman-Fried.
Ellison, 29, has pleaded guilty over her role in the multibillion-dollar collapse of FTX, the cryptocurrency exchange. Customers of FTX and Alameda Research, its sister company where she was chief executive, were defrauded out of an estimated $8 billion.
In a court filing, Ellison’s lawyers told Judge Lewis Kaplan in Manhattan that she deserved leniency for turning on Bankman-Fried. “From her first meeting with prosecutors, Caroline unflinchingly acknowledged her own wrongdoing,” Anjan Sahni, her lawyer, wrote. “She time and again proved herself an enormously credible and important co-operating witness.”
Ellison is scheduled to be sentenced on September 24.
Bankman-Fried, 32, was sentenced in March to 25 years in prison. He was convicted last year in what prosecutors described as one of the biggest financial frauds in American history.
Bankman-Fried’s FTX had promised to be a safe way to buy and sell bitcoin and other cryptocurrencies. However, he was found guilty of misappropriating FTX customer funds to spend lavish sums on luxury property in the Bahamas, risky investments and political donations. Bankman-Fried is appealing against both the verdict and sentence.
His empire started to unravel when Coindesk, a crypto trade publication, published a leaked balance sheet in November 2022 showing that Alameda Research, Bankman-Fried’s hedge fund, and FTX had an “unusually close” relationship. In the same month FTX was declared bankrupt after it emerged that Bankman-Fried had siphoned $8 billion of customer deposits to make risky investments in Alameda Research.
Ellison pleaded guilty to fraud and conspiracy charges in December 2022.
At Bankman-Fried’s trial, Ellison and two other former colleagues testified that the former billionaire had directed them to use FTX customer funds to plug losses at Alameda Research. She said Bankman-Fried, a self-described “utilitarian”, thought that doing what he considered to be the greatest amount of good for the greatest number of people was more important than following rules such as “don’t lie” or “don’t steal”.
Nishad Singh and Gary Wang, former FTX executives who also pleaded guilty to fraud and testified against Bankman-Fried, face sentencing hearings later in the year.
The implosion of FTX sent shockwaves through the crypto world. Days after the collapse of FTX, Gemini, the crypto exchange founded by the billionaire twins Cameron and Tyler Winklevoss, froze customer accounts and later filed for bankruptcy.
Bankman-Fried was arrested in December 2022 at his $40 million apartment complex in the Bahamas.