Caroline Ellison aims to avoid jail time for role in FTX crash | Wilnesh News

Lawyer for Caroline Ellison, star witness in the prosecution of FTX founder Sam Bankman-Fried, advises not to blame her client for being intimidated by her former boss and ex-boyfriend Jailed for his role in the collapse of his cryptocurrency empire.

in court documents On Tuesday night, attorneys said Ellison should be sentenced to at most prison time and supervised release because she quickly returned to the United States from FTX’s Bahamas headquarters in 2022 and chose to voluntarily cooperate with the U.S. Attorney’s Office and financial regulators to help them understand FTX and What went wrong at sister hedge fund Alameda Research.

Judge Lewis Kaplan, who presided over the Bankman-Fried case, cited Ellison’s testimony in his decision in March to sentence the FTX founder to 25 years in prison.

Allison is a principal at Alameda Research, Agree to plea deal in December 2022FTX fell into bankruptcy a month later. Unlike Bankman-Fried, who was convicted on all seven criminal fraud charges, Allison pleads guilty Charges of conspiracy and financial fraud instead of going to trial.

Tuesday’s filing also said the Probation Department recommended that Ellison be sentenced to “three years of supervised release” in recognition of her “excellent cooperation with the government” and “her otherwise unblemished record.” The department’s pre-sentence report, which cited numerous character testimonies about Allison’s ethics and integrity, also recommended against imposing a fine, the attorney added.

“Caroline will not reoffend and does not pose a threat to public safety,” the document states. “Accordingly, it is appropriate to acknowledge Caroline’s early disclosure of the crime, her undiminished acceptance of responsibility, and, most importantly, her extensive cooperation with the government. , granting leniency will promote respect for the law.”

In the filing, FTX CEO John Ray, who has been guiding the cryptocurrency company through bankruptcy proceedings, said Ellison’s cooperation was instrumental in helping his team protect and preserve “hundreds of millions of dollars.” Assets are “valuable”. He added that she worked with his advisors to provide information about cryptocurrency wallet private keys that contained “real estate assets, DeFi positions, FTX exchange internal account information, pre-application transactions using third-party exchanges, and pre-applications.” .

The 67-page document describes much of Allison’s life, starting with her earliest days in Boston and extending through her long and troubled romance with Bankman-Fried. During that time, she “traveled around the world at his direction, first to Hong Kong and later to the Bahamas,” and worked “long hours, high stress, and took Adderall,” the documents said.

Bankman-Fried forced Ellison into a state of isolation that ultimately left her moral compass “distorted,” the lawyer said. Under his guidance, Allison helped “steal billions of dollars” while “living in fear, knowing a catastrophic collapse was possible but fearing that getting out of it would only hasten the collapse.”

“Bankman-Fried convinced her to stay, telling her she was vital to the company’s survival and that he loved her,” all of which “also perversely suggested that he didn’t think she was good enough to be in public.” Be with him at the top.

Bankman-Fried’s attorney did not immediately respond to a request for comment.

The document specifically states that she “gained comfort from a new partner,” whose name is omitted from the document but who her friends consider a “supportive, positive, and grounding influence.” She also wrote a novel, which “has nothing to do with the facts of this case.”

Allison, who turns 30 in November, will have a sentencing hearing on Sept. 24 in the same courthouse where she appeared for several days in the Bankman-Fried trial. Her former roommates and former FTX executives Nishad Singh and Gary Wang will be sentenced in October and November respectively.

— CNBC’s Dan Mangan contributed to this report.