Ex-Alameda CEO Faces Sentencing: Will Cooperation Earn Her Leniency?

Caroline Ellison, the ex-CEO of Alameda Research, is scheduled for sentencing in a Manhattan federal court tomorrow.

She has pleaded guilty to conspiring to defraud FTX customers alongside Sam Bankman-Fried (SBF), her former partner and boss, who received a 25-year prison sentence in April.

At just 29 years old, Ellison faces multiple charges, including two counts of conspiracy to commit wire fraud and one count each of money laundering, commodities fraud, and securities fraud, with maximum sentences ranging from five to 20 years.

Despite these severe charges, her extensive cooperation with authorities may mitigate her punishment. Ellison’s testimony against Bankman-Fried during his trial played a significant role in securing his conviction on all counts.

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As the sentencing approaches, her legal team is advocating for no prison time, proposing three years of supervised release instead. They will argue that her prompt and thorough cooperation with U.S. officials regarding the collapse of FTX and Alameda warrants leniency.

The Probation Department has recommended time served and three years of supervised release, highlighting her “extraordinary cooperation.” Although specific sentencing recommendations from U.S. prosecutors remain unclear, they have acknowledged Ellison’s significant collaboration.

Ultimately, Judge Lewis Kaplan will determine Ellison’s fate. While she has committed serious crimes impacting many Americans, legal experts anticipate her sentence will be considerably lighter than Bankman-Fried’s, given her cooperation and clean record prior to this case.

Alexander Stefanov