The Spectre of Sam Bankman-Fried Overshadowed Caroline Ellison’s Sentencing

Caroline
Ellison,
flanked
by
her
attorneys,
was
sentenced
to
two
years
in
prison
and
three
years
of
supervised
release
for
her
role
in
propping
up
FTX
and
Alameda
Research
last
week.

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Caroline
Ellison
was
not
the
main
character
at
her
own
sentencing
hearing.

When
a
federal
prosecutor
and
a
defense
attorney
took
the
stand
to
discuss
Caroline
Ellison’s
conduct
before
and
after
the
collapse
of
FTX,
her
former
boss
–
and
yes,
former
boyfriend
–
Sam
Bankman-Fried
took
center
stage.

Bankman-Fried
was
convicted
a
year
ago
and
sentenced
more
than
six
months
ago.
Neither
he
nor
any
of
his
representatives
had
a
role
in
Ellison’s
hearing
last
Tuesday.
And
yet,
much
of
Ellison’s
actions
were
presented
through
the
frame
of
Bankman-Fried’s
conduct.

Assistant
U.S.
Attorney
Danielle
Sassoon,
the
prosecutor
who
toyed
with
Bankman-Fried
during
his
cross-examination
last
year,
leading
to
some
indelibly
awkward
interactions,
contrasted
Ellison
with
the
FTX
founder
on
Tuesday.

Bankman-Fried
showed
no
remorse,
while
Ellison
did.
Bankman-Fried
posed
a
threat,
while
Ellison
was
not
a
recidivism
risk.
Bankman-Fried
masterminded
FTX’s
sketchy
actions,
while
Ellison
merely
carried
out
her
former
boss’s
bidding,
Sassoon
stressed
in
her
opening
statement.

“Your
Honor
had
the
opportunity
to
observe
Ms.
Ellison’s
demeanor
when
she
testified
on
the
stand,”
she
said.
“She
was
the
same
person
who
came
to
proffer
with
[the
DOJ
in
2022
and
2023]
…
just
from
a
standpoint
of
demeanor,
this
was
a
sharp
contrast
with
Bankman-Fried.”

Anjan
Sahni,
the
Wilmer
Hale
partner
representing
Ellison
on
the
stand,
spoke
a
bit
more
about
Ellison
as
a
person,
but
still
contrasted
her
with
Bankman-Fried.
Her
role
at
Alameda
was
due
to
Bankman-Fried,
her
concealing
Alameda’s
financial
situation
was
at
the
request
of
Bankman-Fried,
indeed
the
central
question
of
how
Ellison
came
to
a
sentencing
hearing
having
pled
guilty
to
fraud
and
conspiracy
charges
came
down
to
“why
did
Caroline
go
along
with
Sam
Bankman-Fried,”
he
said.

The
true
tragedy,
Sahni
said,
was
“how
rapidly
and
needlessly
the
trajectory
of
Miss
Ellison
unraveled,”
when
she
came
into
contact
with
Bankman-Fried.

“Over
time,
her
whole
professional
and
personal
life
revolved
around
Bankman-Fried,”
he
said.
Ellison’s
primary
concern
was
being
“good
enough”
for
the
one-time
golden
boy
of
crypto.
When
he
expressed
romantic
interest
in
Ellison,
it
was
“genuinely
thrilling”
for
her.

She
had
the
opportunity
to
walk
away
at
several
points,
her
lawyer
told
the
court,
but
she
didn’t.
“She
could
not
bring
herself
to
leave
Bankman-Fried’s
orbit…in
hindsight,
she
sees
it
was
crazy
to
stay.”

Ellison
blinked
rapidly
throughout
the
hearing,
frequently
wringing
her
hands
and
wrapping
her
arms
around
herself
as
she
listened
to
her
attorney
speak,
cried
as
she
spoke
to
the
judge.

“At
each
stage
of
the
process,
it
became
harder
and
harder
to
extricate
myself,”
the
29-year-old
said,
her
voice
wavering.
“I’m
sorry
I
wasn’t
brave.”

Even
Judge
Lewis
Kaplan
referenced
Bankman-Fried
as
he
read
out
his
sentence,
saying
the
FTX
founder
had
Ellison’s
“kryptonite”
and
noting
that
the
guidelines
recommendation
for
the
two
were
identical.

Ellison
cooperated,
while
Bankman-Fried
“denied
the
whole
thing,”
he
said.

“While
you
were
greatly
culpable
in
this
fraud,
no
doubt
about
it,
that
remarkable
cooperation…is
a
fundamental
distinction
between
you
and
Mr.
Bankman-Fried,”
Kaplan
said.

The
judge
seemed
sympathetic
to
Ellison,
and
praised
her
extensive
cooperation
with
prosecutors.

“You’re
a
very
strong
person
in
some
ways,
Miss
Ellison.
You
were
vulnerable
and
you
were
exploited,”
Kaplan
said.
“You
are
genuinely
remorseful
…
your
testimony
was
honest.
Mr.
Bankman-Fried,
as
I
said
at
his
sentencing,
perjured
himself.
There’s
no
way
you’re
ever
going
to
do
something
like
this
again,
I
am
persuaded.”

But
her
remorse,
it
seems,
wasn’t
enough
to
spare
Ellison
a
custodial
sentence.

“In
a
case
this
serious,
to
be
literally
a
get-out-of-jail-free-card
is
not
something
I
can
see
my
way
through
to,”
Kaplan
said.

Ellison

was
sentenced
to
24
months
in
prison,
and
will
serve
at
least
1.5
years
before
being
eligible
for
parole.

If
you’ve
got
thoughts
or
questions
on
what
I
should
discuss
next
week
or
any
other
feedback
you’d
like
to
share,
feel
free
to
email
me
at

nik@coindesk.com
or
find
me
on
Twitter

@nikhileshde.

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See
ya’ll
next
week!