nytimes.com
Ms. Ellison, Sam Bankman-Fried’s former girlfriend and a top executive in his empire, is set to be sentenced on Sept. 24 for her role in the collapse of the crypto exchange.
Caroline Ellison, a close colleague of the disgraced cryptocurrency mogul Sam Bankman-Fried, provided “extraordinary cooperation” to the government, federal prosecutors said on Tuesday, signaling that she should receive a lenient sentence for her role in the sweeping fraud that led to the collapse of the FTX crypto exchange.
Ms. Ellison, 29, who was also Mr. Bankman-Fried’s on-and-off girlfriend, pleaded guilty to fraud shortly after FTX collapsed in November 2022, alongside two other members of his inner circle. In a court filing this month, Ms. Ellison’s defense lawyers asked the judge overseeing the case, Lewis A. Kaplan, to sentence her to three years of supervised release, with no prison time.
In the government’s filing on Tuesday, prosecutors did not recommend a specific sentence to the judge but pointed out that her cooperation was “not only substantial, but exemplary.”
Ms. Ellison was the star witness at Mr. Bankman-Fried’s trial last fall in federal court, where she spent nearly three days on the stand. She described an incriminating spreadsheet that Mr. Bankman-Fried had used to mislead business partners and recounted the final days of FTX, holding back tears as she delivered some of the trial’s most emotional testimony.
Mr. Bankman-Fried was convicted of a sophisticated fraud that siphoned $8 billion from customer accounts to finance venture investments, political donations and other spending. He was sentenced to 25 years in prison in March.
Judge Kaplan is set to decide Ms. Ellison’s sentence in federal court in Manhattan on Sept. 24.
“In her many meetings with the government, Ellison approached her cooperation with remarkable candor, remorse and seriousness,” the prosecutors wrote in their 14-page memo to Judge Kaplan. “And she persevered despite harsh media and public scrutiny and Bankman-Fried’s efforts to publicly weaponize her personal writings to discredit and intimidate her.”
In the defense memo filed a week ago, Ms. Ellison’s lawyers wrote that she had accepted responsibility for her role in the fraud, and said the federal Probation Department had recommended she serve no prison time.
“She regrets her role deeply and will carry shame and remorse to her grave,” the lawyers wrote.
A graduate of Stanford, Ms. Ellison started working with Mr. Bankman-Fried in 2018 when she moved to Berkeley, Calif., to join Alameda Research, a crypto hedge fund that he founded.
Over the next few years, she followed Mr. Bankman-Fried around the world — first to Hong Kong, then to the Bahamas — as he became an international celebrity and built FTX and Alameda into a crypto empire.
In their sentencing memo, Ms. Ellison’s lawyers detailed the often-stormy romantic relationship between their client and Mr. Bankman-Fried. For years, they wrote, Ms. Ellison was effectively in his thrall, living in a social “bubble” centered on Mr. Bankman-Fried. At his suggestion, Ms. Ellison started taking Adderall so that she could work longer hours, the memo said.
Mr. Bankman-Fried initially “suggested their liaison would develop into a full relationship,” the lawyers wrote. “But after a few weeks, he would ‘ghost’ Caroline without explanation.”
Ms. Ellison once asked Mr. Bankman-Fried if she could go with him to New York for the Met Gala at the Metropolitan Museum of Art, the memo said. He replied that he didn’t want to be seen in public with her.
Ms. Ellison “repeatedly considered leaving Alameda,” the memo said. “But Mr. Bankman-Fried convinced her to stay, telling her she was essential to the survival of the business, and that he loved her.”
After FTX collapsed, Ms. Ellison admitted to prosecutors that she had conspired with Mr. Bankman-Fried to steal billions of dollars in customer deposits. She became a subject of public fascination, mobbed by photographers when she arrived in court to testify against him. “The government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment,” the prosecutors wrote on Tuesday.
Since pleading guilty, Ms. Ellison has struggled to find paying work, according to her lawyers’ memo. She was turned down for a job with a charity that promoted math education for young women. At one point, she secured a position helping low-income families prepare tax returns; a couple of weeks later, she was asked to leave after the employer realized who she was, according to a letter from her aunt that was filed with the sentencing memo.
Ms. Ellison has volunteered for more than 700 hours with community organizations, teaching adult literacy classes and fostering rescue dogs, the memo said. She is working with her parents, who both teach at the Massachusetts Institute of Technology, on a math enrichment textbook for advanced high school students, and has written a novella set in Edwardian England.
Ms. Ellison also has a new romantic partner, who has “quietly supported her this last year,” according to a letter submitted by a friend, Leila Clark.
“I was very happy for her,” Ms. Clark wrote. “He was a vast improvement over her ex.”