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Caroline Ellison Seeks Leniency After FTX Fraud Cooperation

By  |  September 11, 2024

Former cryptocurrency executive Caroline Ellison has requested that a federal judge not impose a prison sentence following her guilty plea for involvement in the $8 billion fraud tied to Sam Bankman-Fried’s collapsed cryptocurrency exchange, FTX. According to Reuters, Ellison, once a key figure at FTX, sought leniency in a recent court filing, arguing that her cooperation was vital to the case against Bankman-Fried, her former boyfriend and business partner.

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    In a late-night submission to U.S. District Judge Lewis Kaplan, Ellison’s attorneys emphasized that she has consistently admitted her wrongdoing. “From her first meeting with prosecutors, Caroline unflinchingly acknowledged her own wrongdoing,” stated her lawyer, Anjan Sahni. The filing also praised her for being a credible and essential witness in helping federal prosecutors build their case. Per Reuters, Ellison’s sentencing is set for September 24.

    Bankman-Fried, 32, is currently serving a 25-year sentence for what authorities have described as one of the largest financial frauds in U.S. history. He is appealing both his conviction and the sentence. The FTX collapse, which shocked global financial markets in late 2022, erased Bankman-Fried’s reputation as a philanthropic entrepreneur.

    Related: Crypto Needs Comprehensive Policies to Protect Economies and Investors

    Ellison, 29, pleaded guilty in December 2022 to charges of fraud and conspiracy, just weeks after FTX’s downfall. Per Reuters, her testimony during Bankman-Fried’s trial painted a vivid picture of how customer funds were misused to cover losses at Alameda Research, the hedge fund where she served as CEO. Both Ellison and other former executives testified that Bankman-Fried had personally directed the misappropriation of billions from FTX’s customer accounts.

    In her emotional courtroom appearance, Ellison also offered insights into Bankman-Fried’s personal beliefs, describing how he prioritized what he believed to be the “greater good” over ethical guidelines, such as honesty and integrity. She recounted how the self-described “utilitarian” would justify actions like lying or stealing if he thought they served a higher purpose, offering a revealing glimpse into the mindset that contributed to FTX’s success.

    Source: Reuters