On Sept. 24, almost a year after appearing in court to testify against her ex-boyfriend, Caroline Ellison will return to New York to be sentenced for her involvement in the misuse of user funds at FTX and Alameda Research.

Ellison was the CEO of Alameda before November 2022, when the firm and crypto exchange FTX collapsed. She has arguably been one of the most elusive executives to be indicted on criminal charges, has not posted to her X account in roughly two years and is rarely, if ever, seen in public. 

The former Alameda CEO will return to court on Sept. 24. Judge Lewis Kaplan of the United States District Court of the Southern District of New York will determine Ellison’s future based on sentencing guidelines and recommendations from prosecutors and defense attorneys. Ellison has already pleaded guilty to seven counts of wire fraud, commodities fraud, securities fraud and money laundering related to the misuse of FTX user funds.

One of five individuals to be indicted on criminal charges, Ellison, as well as her colleagues Gary Wang and Nishad Singh, cooperated with prosecutors and testified at the criminal trial of former FTX CEO Sam “SBF” Bankman-Fried in 2023. Bankman-Fried pleaded not guilty to all charges, was found guilty by a jury, and sentenced to 25 years in prison.

Time served or prison?

Substantial differences exist between Ellison’s and Bankman-Fried’s cases. In his trial, sentencing, and appeal, Bankman-Fried largely denied fault for his actions, which led to FTX’s downfall. In contrast, prosecutors said Ellison provided “extraordinary cooperation” and was “forthcoming about her own grave misconduct” in the crypto exchange debacle.

“Ellison played a core role in Bankman-Fried’s criminal schemes, but as the Government noted in Bankman-Fried’s sentencing submission, only he was involved in all aspects of the schemes,” said prosecutors in a Sept. 17 sentencing memo.

If Judge Kaplan imposes the maximum allowable sentence, Ellison could face up to 110 years in prison. Mark Bini, a former Assistant US Attorney in the Eastern District of New York, told Cointelegraph that this outcome was unlikely given Ellison’s cooperation and the language in prosecutors’ sentencing memo.

“I do think she’s going to get time served,” said Bini. “She’s starting with a mountain-high guideline. However, I do think that based upon the extraordinary cooperation and the fact that while she was an insider with SBF, she was not the lead dog. She was really someone who was a lesser co-conspirator.”

Notably, prosecutors called out the “attention and harassment” Ellison had received since 2022 for her role in FTX’s collapse. In a Sept. 9 motion, her lawyers requested Judge Kaplan allow them to redact information on her location, her partner, and “the organizations with which she volunteers,” citing the risk of continued harassment.

Other FTX execs facing prison time

Ellison could be the third person in the case to face potential prison time after SBF and former FTX Digital Markets co-CEO Ryan Salame. Like Ellison, Wang, and Singh, Salame pleaded guilty but did not testify at Bankman-Fried’s trial. In May, he was sentenced to 90 months in prison.

At the time of publication, Judge Kaplan was considering a petition to vacate Salame’s guilty plea, which could still result in perjury charges for the former FTX executive. He is expected to report to prison on Oct. 11.

Singh and Wang have sentencing hearings scheduled for Oct. 30 and Nov. 20, respectively. Their lawyers and prosecutors had not filed sentencing recommendations at the time of publication.

SBF appealing conviction

In April, Bankman-Fried’s legal team filed a notice to appeal the former CEO’s conviction and sentence. On Sept. 13, the lawyers filed a 102-page brief with the US Court of Appeals for the Second Circuit, claiming SBF was “never presumed innocent” in his 2023 trial and citing FTX users’ ability to recover their funds. 

“Unfortunately for SBF, I don’t think [Ellison’s] sentence will have any impact on how the Second Circuit views his,” said Bini, adding: 

“Because [Bankman-Fried’s] guidelines were life in prison, and he got significantly less than that — he got 25 years, which is a long time — a straight appeal on the sentence being unreasonable is going to be difficult.”

Other crypto industry leaders will likely go to court next year. Former Celsius CEO Alex Mashinsky’s criminal trial will begin in January 2025. 

In April, a judge sentenced former Binance CEO Changpeng Zhao to four months in prison. He is expected to be released from a Los Angeles-based halfway house on Sept. 29.

Magazine: ‘Less flashy’ Mashinsky set for less jail time than SBF: Inner City Press, X Hall of Flame