Caroline Ellison’s attorneys claim jail time is unnecessary, ask for no prison term citing cooperation

Attorneys for Caroline Ellison, the former co-CEO of Alameda Research, asked the court not to impose jail time, claiming that a sentence of time served with a period of supervised release would be sufficient for her role in FTX’s fallout.

In a sentencing memorandum filed late Tuesday, Ellison’s lawyers stated that the Probation Department recommended a sentence of time served with three years of supervised release. The lawyers added that Ellison has cooperated with the government and the FTX debtors, and her testimony at Sam Bankman-Fried’s trial last year was helpful.

“Caroline poses no risk of recidivism and presents no threat to public safety. It would therefore promote respect for the law to grant leniency in recognition of Caroline’s early disclosure of the crimes, her unmitigated acceptance of responsibility for them, and — most importantly — her extensive cooperation with the government,” her lawyers said in the filing.

Alameda Research was closely connected to the exchange FTX, both founded by Sam Bankman-Fried. Alameda functioned as FTX’s primary market maker, managing liquidity through the buying and selling of cryptocurrencies.

The financial entanglement between the two firms, characterized by FTX’s loans to Alameda, sparked concerns about conflicts of interest and potential mishandling of customer funds. In March 2024, Sam Bankman-Fried, FTX’s former CEO, was convicted on seven counts of fraud and conspiracy, resulting in a 25-year prison sentence.

Ellison is set to face sentencing on Sept. 24 in a New York courtroom for her role in FTX’s collapse. The fraud charges against her include two counts of conspiracy to commit wire fraud, two counts of actual wire fraud and one count of conspiracy to commit money laundering, among others.

In a  document attached with the sentencing memo, John John J. Ray III, the CEO of the FTX bankruptcy estate, said that Ellison has “provided the Debtors with valuable assistance and cooperation, which resulted in the recovery of hundreds of millions of dollars in Debtor assets for the benefit of creditors.”

Robert J. Cleary, the examiner for the FTX bankruptcy proceedings, also wrote in a letter that Ellison was cooperative and “provided credible information” that was “useful” in carrying out his duties as a bankruptcy examiner.