Caroline Ellison Seeks No Jail Time in FTX Case

Caroline Ellison hopes to avoid prison time for her role in the FTX collapse.

Ellison, the former CEO of FTX sister company Alameda Research, should be sentenced to time served and supervised release, her lawyers argued in a court filing Tuesday (Sept. 10).

“Caroline Ellison is a young person of enormous talent and promise, with a deep commitment to helping others,” the filing said. “Tragically, she became embroiled in the very serious crimes committed at FTX and Alameda Research. Caroline blames no one but herself for what she did. She regrets her role deeply and will carry shame and remorse to her grave.”

Ellison was one of FTX founder Sam Bankman-Fried’s chief lieutenants — as well as a longtime friend and former romantic partner — and testified against him trial last year.

She pleaded guilty to fraud in connection with FTX’s collapse soon after the cryptocurrency exchange went bankrupt in 2022.

Probational officials are recommending three years of supervised release due to her cooperation with the prosecution, per the court filing.

Ellison testified last year that she was complicit in the fraud of FTX, saying that Bankman-Fried directed her and other FTX executives to carry them out.

“The main reason [FTX collapsed] was Alameda borrowing $10 billion from FTX it couldn’t repay,” she testified, referring to the billions of dollars in FTX deposits that Bankman-Fried illegally misappropriated and spent on real estate, venture investments and insider loans.

When cryptocurrency prices plunged in June 2022 and Alameda’s lenders called in their loans, the company was “forced” to use cash from FTX to pay them back.

Bankman-Fried was ultimately convicted on multiple counts of fraud and conspiracy, and sentenced earlier this year to 25 years in prison. He is appealing the jury’s verdict.

The court filing also described a complex and contentious relationship between Ellison and Bankman-Fried, an “on-again-off-again, sometimes-secret” romantic partnership that she understood to be “fundamentally unequal.”

“Deeply unhappy, Caroline repeatedly considered leaving Alameda, but Mr. Bankman-Fried convinced her to stay, telling her she was essential to the survival of the business, and that he loved her (while also perversely demonstrating that he considered her not good enough to be seen in public with him at high-profile events),” the filing said.