Key witness in trial of FTX founder Sam Bankman-Fried seeks no prison time at upcoming sentencing

NEW YORK (AP) — Caroline Ellison, a former top executive in FTX founder Sam Bankman-Fried ’s collapsed cryptocurrency empire and his former girlfriend, is seeking no prison time at her sentencing later this month.

Lawyers for Ellison made the request shortly before midnight Tuesday in a filing in Manhattan federal court in advance of a sentencing scheduled for Sept. 24.

The lawyers cited her immediate and extensive cooperation with U.S. authorities when FTX and related companies collapsed in November 2022, and they noted that the court’s Probation Department recommended that she serve no prison time.

Ellison, 29, pleaded guilty nearly two years ago in the prosecution and testified against Bankman-Fried for nearly three days at his trial last November. After his conviction, Bankman-Fried was sentenced to 25 years in prison. Without her cooperation, Ellison could have faced decades in prison.

“Caroline blames no one but herself for what she did,” the lawyers wrote. “She regrets her role deeply and will carry shame and remorse to her grave.”

In the presentence arguments, the lawyers spoke extensively about Ellison’s on-and-off romantic relationship with Bankman-Fried that stretched over several years.

They said the relationship and her appointment to a role as chief executive at Alameda Research, FTX’s hedge fund affiliate, contributed to her committing crimes at Bankman-Fried’s direction.

She testified at trial that that she divulged a massive fraud to employees even before FTX filed for bankruptcy in November 2022.

She explained to them that funds from FTX investors were improperly used to cover billions of dollars lost by Bankman-Fried in investments or squandered on charity donations, political contributions and purchases that fueled his high-flying lifestyle.

By early December 2022, she was fully cooperating with federal prosecutors, divulging information about Bankman-Fried’s dealings that led directly to some of the charges brought against him in the following weeks, the lawyers wrote.

“Over time, Caroline’s moral compass warped,” the lawyers said. “At Mr. Bankman-Fried’s direction, she took actions that she knew to be wrong, helping him steal billions. She lived in dread, knowing that a disastrous collapse was likely, but fearing that disentangling herself would only hasten that collapse.

“When FTX finally collapsed, Caroline felt intense sadness for all the people they had betrayed, but also tremendous relief, because she did not have to go on lying and stealing for Mr. Bankman-Fried,” they added.

Since testifying at Bankman-Fried’s trial, Ellison has continued to suffer even as she has engaged in extensive charity work, written a novel and worked with her parents on a math enrichment textbook for advanced high school students, according to her lawyers.

“She has been rendered effectively unemployable in the near term by the notoriety arising from this case, and the reputational harm is not likely to abate any time soon,” they said. “Caroline was not motivated by greed and did not take steps to personally profit at the expense of customers.”

She now has a healthy romantic relationship and has reconnected with high school friends she had lost touch with after working for Bankman-Fried from 2017 until November 2022, according to the court papers.

In addition, her lawyers said, she is finalizing agreements with the government, the FTX debtors, along with a comprehensive settlement with in the FTX-related multidistrict litigation that she expects will leave her without anything she earned while employed at Alameda.

Prosecutors were expected to file their presentence arguments prior to sentencing.