Attorneys for Caroline Ellison, the previous co-Chief Government Officer of Alameda Analysis, have filed a sentencing memorandum that argues her sentence ought to be time served for the crimes she dedicated associated to Alameda Analysis and FTX.
The lightly-redacted doc discusses Ellison’s bookish nature, her relationship with Sam Bankman-Fried, and the extent of her cooperation for the reason that failure of the corporations.
It discusses her love of books that started in childhood and mentions that she has been engaged on a math textbook and a novel (with a narrative that isn’t tied to FTX or Alameda).
The doc additionally reiterates Ellison’s recounting of her relationship with Bankman-Fried, which incorporates obvious manipulation and that he would benefit from the facility dynamics.
One instance supplied of Bankman-Fried’s willingness to benefit from the facility dynamics was within the SRM tokens that got to Ellison, however “Mr. Bankman-Fried had arranged the transaction so that Caroline could not sell or transfer the locked SRM tokens without his consent.” In an extra case, “after she was appointed co-CEO, Caroline asked Mr. Bankman-Fried to be given some equity in Alameda Research, but he refused.”
Equally, when it got here to her bonus, which represented a lot of her compensation, “Mr. Bankman-Fried had sole discretion to set Caroline’s bonus. Mr. Bankman-Fried’s unpredictable payment of her bonuses would, at times, leave Caroline feeling vulnerable and serve as a reminder of his authority. For instance, in early 2022, when Caroline was due her bonus for the second half of 2021—her first bonus as co-CEO—she recalls that Mr. Bankman-Fried declined to inform her of the amount or make any payment for months after Caroline understood other Alameda and FTX employees received their bonuses. Caroline perceived this delay as another stark reminder that, although her title was “Co-CEO,” every thing at FTX and Alameda was topic to Mr. Bankman-Fried’s whim.”
One instance of Bankman-Fried’s whims is described as “when Caroline and Mr. Trabucco hired a lawyer from outside the company to serve as Alameda Research’s general counsel, Daniel Friedberg fired the attorney (on what Caroline understood to be Mr. Bankman-Fried’s behalf) a few days after he arrived in the Bahamas, because that attorney had raised questions about the links between Alameda Research and FTX.”
The doc additionally insinuated that Bankman-Fried pressured Ellison to remain on at Alameda Analysis on account of fears that leaving would trigger confidence in Alameda to lower, sophisticated by the truth that “her co-CEO, Mr. Trabucco had been spending more time on his yacht than working for Alameda Research, (though that fact had been concealed to avoid undermining confidence in Alameda).”
Lastly, the doc emphasizes Ellison’s all-hands assembly shortly earlier than the chapter, the place she got here clear to the group, and her subsequent cooperation with legal investigators and the chapter case in its argument for leniency.
Among the many data she has been in a position to present is the “documents and a declaration describing, in detail, how the Bahamian Deltec Bank and Trust provided Alameda with a clandestine line of credit of approximately $2 billion.”
Learn extra: Which FTX and Alameda executives are going to jail and when?
Moreover, the doc mentions that “she did nothing to protect herself from the collapse of FTX and Alameda Research, even though she knew as well as anyone but Mr. Bankman-Fried what was likely to happen. Although Caroline was aware for years that Alameda Research was secretly using FTX customer funds, she nevertheless kept substantially all her assets in her FTX.com user account” (emphasis ours).
“Strikingly, Caroline never transferred any of her holdings off of FTX.com after June 2022, by which point she knew that Alameda Research likely could not pay back its FTX.com ‘borrowing.’ Nor did Caroline make any significant purchases after (or before) that point (other than the Anthropic investment, made in early 2022 to advance AI safety). Caroline declined to protect her own funds from FTX’s collapse because she believed it would be unfair to shield herself while FTX’s customers’ funds were in danger.”
The sentencing memorandum and the Probation Division argue that the extenuating circumstances and cooperation imply that she ought to obtain time-served with three years of supervised launch.
Ellison’s sentencing is scheduled for September twenty fourth.
Received a tip? Ship us an e mail or ProtonMail. For extra knowledgeable information, comply with us on X, Instagram, Bluesky, and Google Information, or subscribe to our YouTube channel.
