Bankman-Fried's ex-girlfriend Ellison to be sentenced over crypto fraud

By Luc Cohen

NEW YORK (Reuters) – Former cryptocurrency govt Caroline Ellison is about to be sentenced on Tuesday for her position in her imprisoned former boyfriend Sam Bankman-Fried’s theft of about $8 billion in buyer funds from the now-bankrupt FTX alternate he based.

Ellison has pleaded responsible to seven felony counts of fraud and conspiracy, and testified as a prosecution witness within the trial of Bankman-Fried, who was convicted of fraud and different fees final yr and is serving a 25-year jail sentence stemming from FTX’s November 2022 collapse.

At her sentencing listening to scheduled for 3 p.m. EDT (1900 GMT) earlier than U.S. District Decide Lewis Kaplan in Manhattan, Ellison will find out how a lot leniency she is going to earn from her cooperation with prosecutors.

Ellison, 29, will virtually actually get far much less jail time than Bankman-Fried did. The crimes to which she pleaded responsible carry a most sentence of 110 years in jail.

Her legal professionals have argued that she ought to get no jail time on account of her cooperation. With out recommending a selected jail time period, the U.S. Lawyer’s workplace in Manhattan, which introduced the fees, additionally urged Kaplan to go simple on Ellison, citing her “extraordinary” cooperation and expression of regret.

“As FTX collapsed, Bankman-Fried continued in publicly denying information and fault,” prosecutors wrote in a Sept. 17 courtroom submitting. “Ellison, then again, expressed aid that the fraud was uncovered, and duty for her wrongdoing.”

Prosecutors stated Ellison met with them about 20 occasions to assist them piece collectively FTX’s unraveling and make their case towards Bankman-Fried.

Prosecutors have known as Bankman-Fried’s actions one of many largest monetary frauds in U.S. historical past. Bankman-Fried, 32, rode a growth in cryptocurrency costs through the COVID pandemic to a web price by October 2021 of, in accordance with Forbes journal, $26 billion. He gained prominence as a beneficiant donor to philanthropic causes and Democratic politicians.

His wealth evaporated when FTX collapsed in November 2022 amid a flurry of buyer withdrawals. The corporate had been extensively seen as a relative safe-haven in a cryptocurrency business beset by volatility and scams.

Bankman-Fried was charged a month later with stealing FTX buyer funds to plug losses at Alameda Analysis, a cryptocurrency-focused hedge fund he based and that Ellison ran from 2021-2022. Ellison pleaded responsible in December 2022.

Bankman-Fried is interesting his conviction and sentence, arguing that Kaplan wrongly excluded proof displaying he thought FTX had sufficient funds to cowl buyer withdrawals. In testifying in his personal protection at trial, Bankman-Fried admitted to creating errors whereas operating FTX, however denied stealing cash.

In his closing argument at Bankman-Fried’s trial, protection lawyer Mark Cohen accused Ellison of “pointing at Sam” to flee the stress she confronted after FTX’s collapse.

Ellison testified over three days at Bankman-Fried’s trial, telling the jury he directed her and others to take cash from FTX’s clients with out their information. In tearful testimony, Ellison stated she felt “indescribably dangerous” in regards to the fraud, and that FTX’s collapse lifted the “dread” hanging over her.

“I felt a way of aid that I did not need to lie anymore,” Ellison testified.

Nishad Singh and Gary Wang, two different former FTX executives who cooperated with prosecutors, are scheduled to be sentenced on Oct. 30 and Nov. 20, respectively.