Attorneys push for no prison time for Caroline Ellison in FTX fraud case

Caroline Ellison’s attorneys are requesting that Ellison’s detention be extended and that she be released on supervised release, citing her cooperation in the FTX case.

Caroline Ellison, the former co-CEO of Alameda Research, is pressing for time served and probation instead of prison time as her sentencing approaches, which is expected to be announced on Sept. 24. In a filing with the court on Sept. 10, Ellison’s attorneys emphasized Ellison’s cooperation with authorities and the Probation Department’s recommendation that she not be sentenced to prison.

Ellison, who pleaded guilty to fraud charges that led to FTX’s multibillion-dollar collapse last November and testified against the exchange’s mastermind, Sam Bankman-Fried, was instrumental in the investigation and subsequent legal process.

That cooperation was key to Bankman-Fried’s conviction on seven counts of fraud and conspiracy, leading to a 25-year prison sentence. Ellison’s attorneys said in their filing that she had shown “extraordinary cooperation with the government” and that a sentence of time in prison with three years of supervised release would be appropriate.

Ellison’s attorneys said the former Alameda Research president “is not a risk for reoffending and does not pose a threat to public safety,” adding that “providing a reduced sentence because of Caroline’s early disclosure of the crimes, her acceptance of responsibility for them, and most importantly, her extensive cooperation with the government, will enhance respect for the law.”

The document included statements from John J. Ray III, CEO of the FTX bankruptcy estate, and Robert J. Cleary, a court-appointed investigator, both of whom commended Ellison for his valuable assistance in recovering assets and providing reliable information.

FTX collapsed in November 2022 amid allegations of embezzlement and misappropriation of billions of dollars in customer funds involving its owners and affiliated hedge fund Alameda Research. The exchange’s founder, Sam Bankman-Fried, was sentenced to 25 years in prison and ordered to repay $11 billion.