Lawyers representing Caroline Ellison, former CEO of Alameda Research, have recommended leniency after she pleaded guilty to seven felony counts related to the collapse of the cryptocurrency exchange FTX.
Lawyers' Recommendation
In a Sept. 10 filing in the United States District Court for the Southern District of New York, Ellison’s legal team submitted letters from friends, colleagues, and family members recommending she serve a light sentence. The attorneys recommended that the former Alameda CEO be sentenced to time served with three years’ supervised release at her Sept. 24 hearing. “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,” said the filing. “Caroline poses no risk of recidivism and presents no threat to public safety. It would therefore promote respect for the law to grant leniency in recognition of Caroline’s early disclosure of the crimes, her unmitigated acceptance of responsibility for them, and—most importantly—her extensive cooperation with the government.”
Ongoing Criminal Case
In December 2022, Caroline Ellison pleaded guilty to seven counts of wire fraud, commodities fraud, securities fraud, and money laundering related to the misuse of user funds between FTX and Alameda. As part of her arrangement with prosecutors, she testified at the criminal trial of Sam Bankman-Fried in October 2023. In her testimony, Ellison claimed that she had created fraudulent balance sheets “that made Alameda look less risky than it was” after the firm took FTX user funds for other investments. Since her court appearances, she has rarely, if ever, been seen in public, and no mention of her sentencing hearing appeared on the public docket until Sept. 9.
FTX and Alameda Execs in Prison
In March, Judge Lewis Kaplan sentenced Bankman-Fried to 25 years. The same judge sentenced former FTX Digital Markets co-CEO Ryan Salame to 90 months in May. Bankman-Fried’s lawyers have filed a notice to appeal the conviction and sentence, while Salame is scheduled to appear in court on Sept. 12 to address a petition to vacate his guilty plea. Given her cooperation and testimony, it’s unclear if Judge Kaplan will sentence Ellison to prison time. If given the maximum allowable sentence, she could face up to 110 years in prison, but most legal experts agree this outcome is unlikely. Former FTX engineering director Nishad Singh and co-founder Gary Wang, who also pleaded guilty to criminal charges and testified at Bankman-Fried’s trial, are scheduled to appear for sentencing hearings on Oct. 30 and Nov. 20, respectively. Their legal teams had not filed sentencing recommendations at the time of publication.
The court proceedings against Caroline Ellison continue to draw public and media attention. Her future depends on Judge Kaplan’s decision, who will consider her level of cooperation and efforts to rectify the consequences of her crimes.
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