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Caroline Ellison ‘knew’ Sam Bankman-Fried’s alleged cheating was ‘wrong’

Sam Bankman-Frieda’s ex-girlfriend made a stunning admission during a secret court hearing that she knew she was “wrongfully” involved in his alleged cheating scheme, according to a transcript released Friday.

“I’m really sorry for what I did,” Caroline Ellison said. “I knew it was wrong.”

Ellison, 28, pleaded guilty Monday to federal fraud charges related to her role as CEO of hedge fund Alameda Research, which allegedly received billions of dollars from Bankman-Fried’s now-bankrupt cryptocurrency exchange FTKS.

Ellison admitted in federal court in Manhattan that she “understood that many FTKS clients invested in crypto derivatives and that most FTKS clients did not expect FTKS to lend their digital assets and fiat currency deposits to Alameda in this way.”

FTKS co-founder Gary Wang also pleaded guilty to the $8 billion collapse of FTKS, and he and Ellison are cooperating with the feds, Manhattan U.S. Attorney Damian Williams revealed Wednesday.

Caroline Ellison

Ellison pleaded guilty Monday to federal wire fraud charges.


FTKS founder Sam Bankman-Fried

FTKS founder Sam Bankman-Fried was released on $250 million bond.


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Gary Wang

Gary Wang also pleaded guilty.

FTKS Arena logo

FTKS was founded in 2019.


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Bankman-Fried, 30, was extradited from the Bahamas on Wednesday to face an eight-count indictment that carries a maximum sentence of 115 years in prison.

He was released on $250 million bail and placed under house arrest at his parents’ home in Palo Alto, Calif., near Stanford University, where they are both law professors.

Ellison’s plea deal says she faces up to 110 years in prison and that prosecutors “will not recommend any specific sentence” in exchange for her cooperation.

But he also says that if she provides “substantial assistance,” he will file a letter asking for a sentence that is less severe than required by federal sentencing guidelines.

Former Brooklyn federal prosecutor Moira Penza said it was “too early” to say how much time Ellison would have to serve in prison, but noted that “early cooperation is the best thing she could have done to seriously reduce her possible sentence.”

“Ms. Allison was in the door as early as she could and she didn’t even have to be charged. She signals at every opportunity that she takes responsibility and is truly remorseful,” Penza said.

Penza also noted that “it is not uncommon for co-workers who testify — even those facing lengthy sentences like Ms. Ellison — to receive probation rather than any jail time.”

Defense attorney Ira Sorkin — whose former client, the late Bernie Madoff, was sentenced to 150 years in prison for his epic Ponzi scheme — declined to guess what would happen to Ellison.

“It is impossible to predict what she will get at this stage,” he said.

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