Caroline Ellison, former CEO of Alameda Research and key figure in the collapse of cryptocurrency exchange FTX, may avoid jail time following her cooperation in the case against Sam Bankman-Fried, the disgraced founder of FTX.
Ellison, 29, is scheduled for sentencing on Tuesday but has received support from prosecutors, who praised her “extraordinary cooperation” in helping to secure Bankman-Fried’s conviction.
Ellison played a crucial role in the implosion of the FTX empire, which misappropriated billions of dollars from customer funds. However, her decision to testify against Bankman-Fried, who was sentenced to 25 years for orchestrating one of the largest financial frauds in US history, has positioned her for leniency.
Legal experts agree that Ellison is unlikely to receive a prison sentence. Prosecutors have credited her with providing essential testimony about the inner workings of FTX and Alameda, where she helped orchestrate fraudulent activities under Bankman-Fried’s direction. Her testimony was central to the case and highlighted her subordinate role compared to the company’s founder.
The US Probation Department has recommended time served with three years of supervised release for Ellison. While the final decision rests with Judge Lewis Kaplan, experts believe that Ellison’s cooperation and the absence of any prior criminal record make a non-prison sentence likely.
In contrast to Bankman-Fried, who has continued to deny wrongdoing and is appealing his conviction, Ellison quickly accepted responsibility and has been cooperating with prosecutors since her guilty plea in December 2022.
Despite her deep involvement in the fraud, legal analysts point out that Ellison lacked the level of control Bankman-Fried exercised. This distinction, along with her cooperation, may influence the court’s decision to spare her jail time, as the US legal system often offers reduced sentences for those who help bring down more significant offenders.
The Washington Post, CNN, and CNBC contributed to this report.
