The strength of Ellison’s testimony against Bankman-Fried went a long way toward persuading the judge to show leniency, according to Paul Tuchmann, a former U.S. attorney and partner at the law firm Wiggin and Dana.
Testifying at Bankman-Fried’s October 2023 criminal trial, Ellison portrayed her former lover as the driving force behind the FTX fraud. On the stand, she portrayed Bankman-Fried as a determined and calculating individual, and to the jury, she described his various scams, his careful management of his public image and his warped attitude toward risk. Bankman-Fried “was perfectly happy to take risks as long as he believed it was a positive expected value,” said Ellison, who was under scrutiny by prosecutors. “He talked about being willing to take big coin flips, like the coin flip where if it lands heads, you could lose $10 million, but if it lands tails, you make a little over $10 million.”
Ellison wept at the podium as she recalled her “state of terror,” wracked with guilt over the stolen funds and the perverse relief she felt as FTX began to fall apart. “It’s something I thought about every day, worrying about what would happen when the truth finally came out,” Ellison said. “I felt relief that I didn’t have to lie anymore.”
“In cases like this, it’s usually very important for the prosecution to have someone who is close to the main defendant who is being prosecuted, who can take the jury inside,” Tuchmann says. “She was an incredibly valuable witness in an incredibly important case.”
The judge took that cooperation into account. “I’ve seen a lot of collaborators over 30 years. I’ve never seen anyone like Ms. Ellison,” Kaplan said. What was “amazing” was that “there wasn’t a single instance” in which Ellison’s statements and interviews with law enforcement differed from the evidence in the case, he said.
Ellison’s costs likely also played a role in the judge’s leniency. “In this case, there was something approaching harassment [of Ellison] because of the very intense press interest in the case. Then came the revelation of her personal, romantic life to the world — which would have been very painful for anyone,” Tuchmann says. “You can get more recognition if the collaboration has consequences. The consequences for her were enormous.”
As Ellison prepares to begin his time behind bars, other members of FTX’s inner circle await their own sentences. Former FTX executives Nishad Singh and Gary Wang, who pleaded guilty to fraud, will be sentenced on Oct. 30 and Nov. 20, respectively.
Meanwhile, Bankman-Fried, trying to avoid a lengthy prison sentence, is pushing for a retrial. “Bankman-Fried himself has never been presumed innocent… He was found guilty by the judge who presided over his trial,” his lawyers wrote in a filing with the U.S. Court of Appeals. But the chances of overturning the conviction are slim, and the decision to fight the charges to the bitter end — unlike Ellison and his fellow co-conspirators — may still prove fruitless.
“Kaplan is a very well-respected judge, especially in complicated white-collar cases. The summary argument — that he got it all wrong — is a very difficult argument,” Naftalis says. “The appeal is a bullseye.”
As people filed out of the courtroom Tuesday, Ellison’s two younger sisters were crying visibly but silently next to their parents. One of Ellison’s lawyers touched her back to comfort her. Ellison didn’t move.
Additional information provided by Caroline Haskins.