Caroline Ellison, the former CEO of Alameda Research and ex-girlfriend of Sam Bankman-Fried, is set to be sentenced on Tuesday for her role in the downfall of the cryptocurrency exchange FTX and its affiliated hedge fund Alameda Research.
Ellison’s defense team and prosecutors have requested leniency from Judge Lewis Kaplan, citing her crucial testimony against Bankman-Fried as a key factor in the federal government’s case.
As the CEO of Alameda Research, Ellison was a key player in Bankman-Fried’s scheme to defraud millions of FTX investors out of nearly $8 billion in deposits. Funds from FTX were misused to cover billions of dollars in losses incurred by Bankman-Fried’s investments and to fuel his lavish lifestyle.
Ellison’s testimony was a pivotal moment in the trial, as she delivered emotional and detailed accounts of Bankman-Fried’s wrongdoing. She described an incriminating spreadsheet that Bankman-Fried used to deceive business partners and revealed that he knowingly defrauded investors. Ellison also testified that she and Bankman-Fried bribed Chinese officials with $100 million to regain access to over a billion dollars in frozen cryptocurrency, allowing them to continue their scheme.
Ellison’s relationship with Bankman-Fried began in 2015 when she interned at Jane Street, a global proprietary trading firm. She later joined Alameda Research, his crypto trading firm, and followed him to Hong Kong and the Bahamas.
The two had a tumultuous on-again, off-again relationship, with Bankman-Fried convincing Ellison to stay with the company despite her reservations. According to a pre-sentencing memo, Bankman-Fried told her she was “essential to the survival of the business and that he loved her.”
During the trial, Bankman-Fried’s legal team portrayed Ellison as an insecure and incompetent executive who didn’t deserve her high salary. However, the jury ultimately found Bankman-Fried guilty of seven fraud and conspiracy counts, and he was sentenced to 25 years in prison.
Ellison, 29, pleaded guilty to fraud in November 2022 and cooperated with prosecutors, testifying against Bankman-Fried. Her defense team has requested a sentence of three years of supervised release and no prison time, citing her remorse and cooperation with the government.
Prosecutors have praised Ellison’s cooperation, describing it as “not only substantial but exemplary.” Ellison is one of four former FTX executives who pleaded guilty in the case, with Gary Wang and Nishad Singh set to be sentenced in November and October, respectively.
