Caroline Ellison, a former top executive of Sam Bankman-Fried’s fallen cryptocurrency empire FTX, faces years in prison when she is convicted of fraud on Tuesday, but prosecutors say she deserves leniency because of her “extraordinary cooperation” in investigating the company .
Ellison, 29, pleaded guilty nearly two years ago and testified against Bankman-Fried for nearly three days at a trial last November.
In a court filing, prosecutors said her testimony was the “cornerstone of the trial” against 32-year-old Bankman-Fried, who was found guilty of fraud and sentenced to 25 years in prison.
Ellison’s own lawyers asked the court for a lighter sentence, citing both her trial testimony and the trauma of her on-off romantic relationship with Bankman-Fried — though they also emphasized that she was not trying to avoid responsibility for her. crimes.
“Caroline blames no one but herself for what she did,” her lawyers wrote in a court filing. “She deeply regrets her role and will carry shame and remorse with her to her grave.”
FTX was one of the world’s most popular cryptocurrency exchanges, known for its Superbowl TV ad and its extensive lobbying campaign in Washington, before it collapsed in 2022.
U.S. prosecutors accused Bankman-Fried and other top executives of raiding client accounts on the exchange to make risky investments, making millions of dollars in illegal political donations, bribing Chinese officials and buying luxury real estate in the Caribbean.
Ellison was CEO at Alameda Research, a cryptocurrency hedge fund controlled by Bankman-Fried that was used to handle some of FTX’s client money.
Her working relationship with Bankman-Fried was complicated by her romantic feelings for him, her lawyers wrote in a lawsuit.
“From the outset, Mr Bankman-Fried’s behavior was erratic and manipulative. He initially expressed strong feelings for Caroline and suggested that their relationship would develop into a full-blown relationship. But after a few weeks, he “ghosted” Caroline without explanation, avoided her outside of work and refused to respond to messages that were not work-related, her lawyers said.
When the company began to run into trouble, Ellison disclosed the massive fraud to employees who worked for her even before FTX filed for bankruptcy, her lawyers wrote.
Ultimately, she also spoke extensively with American researchers.
“Ellison cooperated at great personal and professional cost, weathering harsh media and public criticism and attempts at witness tampering by Bankman-Fried,” prosecutors wrote.
They said she had been outspoken about her own misconduct and was “uniquely positioned to explain not only the what and how of Bankman-Fried’s crimes, but also the why.”
“During her many meetings with the government, Ellison approached her collaboration with remarkable candor, remorse and seriousness,” they wrote.
“She devoted herself to an extensive document review that helped identify key supporting documents in an investigation hampered by Bankman-Fried’s systematic destruction of evidence.”
According to them, her testimony during the trial was credible and convincing.
Judge Lewis A. Kaplan will determine the sentence.
Since her testimony at the Bankman-Fried trial, Ellison has engaged in extensive charity work, written a novel and worked with her parents on a math enrichment textbook for advanced high school students, her attorneys said.
They said she is also now in a healthy romantic relationship and has reconnected with high school friends she lost touch with while working for and sometimes dating Bankman-Fried from 2017 to late 2022.
