Judge Grants Privacy for SBF’s Ex Caroline Ellison’s Supporters, But Opens Door for Exceptions Before 24 September Sentencing

Caroline Ellison's Sentencing Approaches as Key Witness in FTX Fraud Case

Caroline Ellison, the former CEO of Alameda Research, is scheduled to face sentencing on 24 September 2024, at 3:00 p.m. EDT.

Ellison, born in 1994, played a pivotal role in the fraud scandal involving the cryptocurrency exchange FTX and its founder Sam Bankman-Fried, who was found guilty of orchestrating one of the largest financial frauds in recent history.

L-R: Caroline Ellison and her ex-lover, Sam Bankman-Fried

Ellison’s testimony, given during Bankman-Fried’s month-long trial in 2023, was instrumental in securing his conviction.

She alleged that Bankman-Fried directed her to commit fraud, orchestrating a scheme to hide FTX and Alameda's true financial health from lenders and investors.

Bankman-Fried was later sentenced to 25 years in prison after being convicted on all seven charges he faced.

Redactions and Privacy Concerns Ahead of Sentencing

Ellison’s legal team, led by Anjan Sahni of WilmerHale, has raised concerns over the privacy of individuals who have submitted letters of support ahead of her sentencing hearing.

In a motion filed on 9 September 2024, Sahni requested that the court redact the names and personal information of these individuals, citing the potential risks of harassment and doxing.

Ellison, who has been the subject of intense media scrutiny since the case began, has faced ongoing efforts to disclose her private information.

Sahni pointed out in his filing,

"Ms. Ellison’s friends should not be subject to harassment and doxing because they have written to the Court."

This motion also seeks to redact "certain irrelevant medical information" that may be included in Ellison’s journal entries, which are expected to form part of her sentencing submission.

These entries reportedly contain information about "planned and contemplated medical treatments" that Ellison believes are not directly relevant to the case or a formal medical diagnosis.

Additionally, her defence team is requesting that personal details about Ellison’s current address, partner, and any organisations she volunteers with be excluded from public filings to protect her safety and privacy.

Judge Kaplan Grants Redaction Request with Potential Exceptions

Judge Lewis Kaplan, who is presiding over Ellison’s case, granted the motion on 10 September 2024, allowing for the redaction of sensitive information from the public record.

However, he also left the door open for third parties to challenge the decision and request access to the redacted information.

Kaplan stated,

"Motion granted without prejudice to any supported application by a non-party for access. If an application were made, the defendant would have the burden to justify any continued restricted access."

This stipulation creates a potential avenue for third-party journalists or watchdog groups to seek the release of the names and personal details of Ellison’s supporters.

One news outlet, Inner City Press, has already filed a letter opposing the redaction of the names of Ellison’s character witnesses.

The organisation argued that these names should be made public, similar to how Judge Kaplan previously authorised the release of the names of Bankman-Fried's bond suretors.

A History of Cooperation and the Upcoming Sentencing

Ellison’s cooperation with the U.S. Department of Justice, particularly during the trial of Bankman-Fried, is widely seen as a factor that could reduce her potential prison sentence.

She pleaded guilty to seven charges in December 2022, including wire fraud, commodities fraud, securities fraud, and money laundering, all tied to the misappropriation of billions in customer deposits at FTX and Alameda Research.

Despite the fact that these charges carry a maximum sentence of 110 years, legal experts believe her cooperation and testimony will likely result in a reduced sentence.

Throughout her testimony in 2023, Ellison appeared visibly uncomfortable and emotional, particularly when recounting the pressure she faced while helping to conceal FTX and Alameda’s fraudulent activities.

At one point, she even broke down in tears while discussing the toll the deception had taken on her.

"It was a huge relief when it all came crashing down."

She admitted, reflecting on the immense strain she endured while keeping the fraudulent operation hidden.

Upcoming Sentencing for Other FTX Insiders

Ellison, however, is not the only former FTX executive facing legal repercussions.

Ryan Salame, who co-headed FTX Digital Markets, was sentenced earlier this year to 7.5 years in prison.

Ryan Salame

Meanwhile, as Ellison prepares for her sentencing, two other former FTX executives, Nishad Singh and Gary Wang, also face upcoming hearings.

L-R: Gary Wang and Nishad Singh

Singh is slated to be sentenced on 30 October, while Wang’s sentencing will occur on 20 November, potentially marking the final stage of the legal proceedings surrounding FTX’s collapse.

Both Singh and Wang, like Ellison, pleaded guilty to criminal charges and are cooperating with authorities in the investigation.

Ellison’s sentencing on 24 September will make her the third prominent figure connected to FTX to face prison time.

While her exact sentence remains unclear, the potential impact of her cooperation with federal authorities will likely play a significant role in determining her fate.