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Attorneys representing Caroline Ellison, the former co-CEO of Alameda Research, have asked a federal court to forego a jail sentence for her role in the collapse of FTX.
According to a sentencing memorandum filed on Tuesday, Ellison’s legal team argues that time served, along with supervised release, is a fitting punishment given her extensive cooperation with the U.S. government and her remorse for the crimes.
Background
Ellison, who pled guilty to multiple charges linked to the downfall of FTX in December 2022, is scheduled for sentencing on September 24 in New York. The charges include conspiracy to commit wire fraud, actual wire fraud, and conspiracy to commit money laundering, among others.
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Despite these serious offenses, her lawyers emphasize that she poses no risk of repeating her actions and has demonstrated a commitment to helping investigators and FTX debtors recover assets.
Proposed Sentence
The legal filing highlights that the Probation Department has recommended a sentence of time served, followed by three years of supervised release. Ellison’s attorneys maintain that such leniency would reflect her early disclosure of the fraudulent activities and her significant contributions to the government’s case.
They point to her testimony against Sam Bankman-Fried, the former CEO of FTX, as crucial in securing his conviction on seven counts of fraud and conspiracy earlier this year. The filing reads:
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“Caroline poses no risk of recidivism and presents no threat to public safety. It would therefore promote respect for the law to grant leniency in recognition of Caroline’s early disclosure of the crimes and her unmitigated acceptance of responsibility for them.”
Ellison’s Cooperation in FTX Case
Caroline’s lawyers further stressed that Ellison’s efforts have already yielded positive outcomes for the FTX estate, helping to recover hundreds of millions of dollars in assets. John J. Ray III, the current CEO of the FTX bankruptcy estate, supported this view, noting in a separate statement that Ellison’s assistance proved instrumental in recovering funds for the benefit of FTX creditors.
Additionally, Robert J. Cleary, the examiner for FTX’s bankruptcy, described Ellison as cooperative and forthcoming with valuable information, enhancing the efficiency of the ongoing bankruptcy proceedings.
As Ellison’s sentencing date approaches, the court will weigh her cooperation, remorse, and the impact of her actions on one of the largest financial scandals in crypto history.
