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What fate awaits FTX cohort Caroline Ellison?

Caroline Ellison, Alameda Foundation, FTX, Sam Bankman-Fried

International

What fate awaits FTX cohort Caroline Ellison?

Caroline Ellison, ex-girlfriend of FTX kingpin Sam Bankman-Fried has pleaded guilty to seven counts and faces up to 110 years in prison. Meanwhile, according to media reports, Caroline Ellison, former Chief Executive Officer (CEO) of Alameda Foundation, an entity of FTX will not be allowed to leave the continental United States, and must forfeit any proceeds derived from the commission of the offenses she has been charged with, according to a recently unsealed plea agreement with the US Attorney’s Office of the Southern District of New York.

She will also need to pay restitution of an amount determined by the court.

The plea agreement was first obtained by New York’s Inner City Press, a publication that covers court proceedings in the city’s federal court.

The agreement states that if Caroline Ellison fully cooperates with the SDNY’s investigation, as well as any other law enforcement agency designated by the office, she won’t be further prosecuted criminally except for possible criminal tax violations with regard to the wire and commodity fraud charges that resulted from commingling funds between FTX and Alameda Research accounts. The deal does not guarantee that other agencies will not pursue prosecution at a later date.


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A court would need to agree to the plea deal for it to be in effect.

A paragraph of the document has been redacted, removing information about some of the possible charges.

Caroline Ellison will be permitted bail, provided she can provide a US$250,000 personal recognizance bond and restrict travel to the continental United States. She will also need to surrender any travel documents she has.

The plea deal also contains language that says if Ellison is not a US citizen, it is very likely that her removal from the U.S. will be mandatory. It is assumed that Caroline Ellison is a US national, but it is unclear if she might have abandoned her nationality for a citizenship of convenience for tax reasons, which is a popular trend among some crypto traders living abroad, as the US taxes non-residents.

Meanwhile, people are expressing their opinion on this issue on social media and news sites. Here are few of those comments:

Kenneth: They sort of left out the key part. She signed a plea bargain, can’t leave the country and had to pay her own bail. I’m not a lawyer but should there be something included on what her jail term should be? If it’s zero then at least include that in the article.

Steven: Totally unjust in my opinion. She should be facing substantial jail even if she testifies and cooperates. It certainly looks like she was a principal actor in the entire scheme and she should have to pay for her criminal behavior accordingly.


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Tom: Why is she being treated leniently? She defrauded people of millions.

Kirk: First to squeak is the first to walk. Forfeiture of assets is what the government really wants. Not a penny will go to the victims.

Ron: Whatever happened to having competent people who know what they are doing? What possible qualifications does this toothy girl have in running a hedge fund investing in cryptocurrency? (Other than her on again/off again bed and boyfriend who thought he was a master at cryptocurrencies with absolutely zero qualifications). I have watched every House MD episode and every Good Doctor episode. I am now a qualified brain surgeon by these standards!

Erwin: Why would she be set free on bail, this is not an alleged crime, Caroline admitted she intentionally duped investors.

Elijah: Send her to Juvenile Hall until she turns 18 in five years from now, during which time hopefully she will have earned that associate degree that would qualify her to apply for a managerial position in her local Burger King branch. Minors deserve a measure of leniency given their age.

Cooper: Why are we offering the CEO a plea agreement for something that should be a slam dunk prosecution?

Thomas: I am truly amazed that this lady is going to be free on bail. She is as guilty as SBF himself. She knew people’s money were taken out of their accounts to cover her lover’s bad decisions.


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Christopher: She gets a slap on the wrist for running a fraud and stealing billions. WHAT A SHAM.

Fred: Caroline Ellison looks like a little kid but is apparently 28 years old. Had she applied her mathematical intelligence for good versus greed she could have been respected and lead a productive life. Her dishonesty has cost her everything that she thought she had gained, as well her soon to be missing freedom, What a sad waste of life’s gifts.

Karl: The guy is in cuffs and going to court as soon as possible, she gets bail and can travel around the country. Once again, American courts view women as lesser threats and of lesser competence…until it’s too late.

Callen: Who would trust this person with millions? Probably the criminal running the whole thing.

Alex: Everyone keeps talking about getting money back to the “victims” but you gotta remember, this was a completely unregulated crypto exchange being run by a bunch of kids in the Bahamas. There simply aren’t many laws around this kind of thing and the question of whether anyone who lost money actually has a legal claim to getting anything back is actually somewhat up in the air. Crypto is, by nature, a risky, highly volatile, speculative asset class…the possibility of losing your shirt is part of the game. There have been attempts to try and introduce regulation that would, in part, protect investors, but the industry has been highly resistant to it since it undermines the philosophy of crypto being a currency that exists outside of government control. While I think all of these folks should receive stiff jail time, I also don’t have much sympathy for the crypto investors. This kind of thing is just another example of why prudent investors have largely steered clear of crypto, or, at the very least, treated it as an interesting novelty to dabble in where you can occasionally make some money on the side, but by and large, are more likely to lose money…often quite a lot of money.


Also read Bank Bene Merenti, a crypto Ponzi scheme


Judy: Bullish! No deals – they all need to do time. I am sure there is a strong case against all of them. I doubt her cooperation is imperative to a successful prosecution of SBF and others.

William: Learning she was Sam B-F’s ex, I concluded the latter is doomed. Scorned and will turn state’s evidence. Thus, it played out. Non-sequitur, here in far northeast Vermont (think Canadian border) a man was convicted over $50++MM embezzlement of EB-5 funds in connection with ski resorts. He was the mastermind. After a few months of minimum security in Florida, he is “begging” for home release since he turned state’s evidence. Dude?! Get real. Although capital punishment is out of fashion…these are serious, damaging offenses and IMO there shouldn’t be any leniency.

Nonie: The law should be changed such that for frauds of more than 10 million dollars, the death penalty is an option. We will not fix our society without extreme punishments for really serious crimes.

Sohail Choudhury

Sohail Choudhury is the Executive Editor of Blitz

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