The effectiveness of Ellison’s testimony against Bankman-Fried played a significant role in persuading the judge to grant leniency, according to Paul Tuchmann, a former US prosecutor and partner at the law firm Wiggin and Dana.
During Bankman-Fried’s criminal trial in October 2023, Ellison portrayed her former partner as the mastermind behind the FTX fraud. On the witness stand, she described Bankman-Fried as manipulative and strategic, detailing his various deceptive strategies, the meticulous management of his public persona, and his distorted approach to risk. Ellison, under prosecution examination, stated that Bankman-Fried was comfortable with high-stakes risks if he believed the potential gains were positive. “He talked about being willing to take large coin flips, like a coin flip where if it comes up tails, you might lose $10 million, but if it comes up heads, you make slightly more than $10 million,” she testified.
Ellison became emotional as she recounted her internal turmoil, feeling immense guilt over the misappropriated funds, and a twisted sense of relief as FTX began to collapse. “It’s something that had been on my mind every day, worrying about what would happen when the truth finally came out,” she said. “I felt a sense of relief that I didn’t have to lie anymore.”
Tuchmann highlighted the importance of having a close associate of the lead defendant testify in such cases. “In cases like this, it is usually so important to the prosecution to have someone who is close to the lead defendant you are trying, who can take the jury inside,” he explained. “She was an immensely valuable witness in an immensely important case.”
The judge acknowledged Ellison’s cooperation. “I’ve seen a lot of cooperators in 30 years. I’ve never seen one like Ms. Ellison,” commented Judge Kaplan, noting that Ellison’s testimony and interviews with law enforcement consistently matched the material evidence in the case.
Ellison’s personal sacrifices were also considered by the judge. “In this case, you had what was close to harassment [of Ellison] because of the very large amount of press coverage of the case. Then you had the fact that her personal, romantic life was revealed to the world—which would be very painful for anybody,” Tuchmann elaborated. “You can get more credit if the cooperation has consequences. The consequences to her were great.”
As Ellison begins her prison sentence, other members of the FTX core team await their fate. Former executives Nishad Singh and Gary Wang, both of whom admitted to fraud, are scheduled for sentencing on October 30 and November 20, respectively.
Meanwhile, Bankman-Fried continues to seek a retrial to avoid a prolonged prison term. His legal team, in a filing to the US Court of Appeals, argued that he was presumed guilty by the presiding judge instead of being presumed innocent. However, overturning the conviction appears unlikely, and his decision to contest the charges, unlike Ellison and other co-conspirators, may prove disadvantageous.
“Kaplan is a highly respected judge, particularly in complex white-collar cases. The theme of the brief—that he got it all wrong—is a very hard argument to make,” said Naftalis. “The appeal is a long shot.”
As the proceedings adjourned on Tuesday, Ellison’s two younger sisters were seen crying quietly beside their parents, while one of Ellison’s lawyers tried to comfort her with a touch on the back. Ellison remained unmoved.
Additional reporting was provided by Caroline Haskins.