U.S. Government Recommends Lenient Sentence For Alameda Research CEO Caroline Ellison

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Julia Smith

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Julia Smith

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Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

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September 20, 2024

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The U.S. government is recommending a lenient sentence for Caroline Ellison, former Alameda Research CEO and ex-girlfriend of Sam Bankman-Fried, following her “extraordinary” testimony in his landmark fraud case last fall.

U.S. Prosecutors Praise Ex-Alameda Research CEO Caroline Ellison

In a new letter filed to U.S. Southern District of New York Judge Lewis A. Kaplan, prosecutors praised the former crypto executive for her “substantial assistance” in crafting the case against Bankman-Fried and “bringing the most culpable party to justice.”

“The ‘what’ and ‘how’ of the crimes, as well as the ‘why,’ would have been difficult to prove without Ellison’s testimony,” prosecutors wrote.

Thanks to Ellison’s decision to testify, Bankman-Fried was ultimately sentenced and convicted for orchestrating a massive digital asset scheme that misappropriated over $8 billion of investor funds.

The FTX founder tried to discredit his former girlfriend in the leadup to his watershed trial by releasing writings from her personal journal detailing that she was “unhappy” and “overwhelmed” ahead of the crypto exchange’s collapse to “The New York Times” in July 2023; a move that saw SBF’s bail revoked for tampering with a witness.

Similarly, a therapist whom Ellison had confided in shared her personal information with “Moneyball” author Michael Lewis, who later published it in his book about Sam Bankman-Fried’s crypto journey, “Going Infinite.”

“The government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment,” prosecutors elaborated. “The attendant professional consequences of this level of notoriety are obvious and unlikely to be shortlived.”

Sam Bankman-Fried Associates Face The Music

In addition to showing remorse for her participation in the international crypto scheme, lawyers for the U.S. government argue that the former Alameda Research CEO had a “limited role” in defrauding investors of the now-defunct crypto exchange.

“While others, like Ryan Salame, tried to withdraw substantial sums of money from their FTX accounts the days before FTX declared bankruptcy, Ellison did not,” the letter reads.

Salame became the first SBF associate to be sentenced when he received a 7.5-year prison term this past May.

The former FTX Markets CEO has since moved to redact his guilty plea after he claimed the U.S. government failed to fulfill its promise of not investigating his partner, former congressional hopeful Michelle Bond, on campaign finance violations.

Bond pleaded not guilty to the criminal charges this week.

Ellison is set to be sentenced on September 24 in New York City.