A plea deal reached by Alameda and FTX associate Caroline Ellison in December provides insight on whether she will be prosecuted further.

During testimony on Oct. 12, Ellison was questioned by the Assistant U.S. Attorney (AUSA) for the Southern District of New York. There, she stated that she had reached a cooperation agreement — that is, a plea deal — with prosecutors.

In one exchange, she briefly provided a description of the plea deal:

AUSA: What do you have to do under the cooperation agreement?
Ellison: Tell the truth.
AUSA: And the [government] will do what?
Ellison: Write a letter to the judge about my crimes and cooperation.

The Assistant U.S. attorney ended his questions there.

Ellison is largely immune from prosecution

Ellison’s testimony omitted the fact that prosecutors have not merely agreed to write a letter but have, in fact, agreed not to prosecute Ellison further.

The text of the cooperation agreement states:

“If the defendant [Caroline Ellison] fully complies with the understandings specified in this Agreement, the defendant will not be prosecuted criminally by this office [the U.S. Attorney’s Office for the Southern District of New York] for any crimes, except for criminal tax violations.”

Ellison faced seven counts of charges related to seven charges related to wire fraud, securities fraud, commodities fraud, money laundering, and conspiracy to commit those actions. Those charges carried a maximum sentence of 110 years in prison.

The plea deal says that the office will not prosecute Ellison on nine issues, including on five points that cover all of the above counts. The office additionally will not prosecute Ellison on four other matters, including her role in frontrunning FTX token listings, manipulating the price of FTT and Serum tokens, making payments to Chinese officials, and receiving and transferring FTX customer funds through U.S bank accounts.

Not completely in the clear

The plea deal does not provide Ellison with complete immunity. As noted, prosecutors stated that they cannot and will not promise not to prosecute any criminal tax violations.

Furthermore, prosecutors said that the agreement does not provide prosecution for crimes that fall outside of the above actions. Prosecutors also noted the agreement does not prevent other federal, state, or local authorities from prosecuting Ellison.

Ellison must also forfeit any funds and property originating from her actions. These forfeitures will not count toward any other penalty or fine that Ellison might pay. Matthew Russell Lee of Inner City Press observed that it is unclear whether Ellison will be made to surrender a $20 million bonus that she admitted to during testimony.

Prosecutors noted that sentencing is ultimately the court’s decision and said that they will inform the court of Ellison’s cooperation through a letter.

Another FTX associate, Gary Wang, similarly testified that he still faces up to 50 years in prison and said that the government will write a letter to the court. Once again, his plea deal states that the office will not prosecute him for several crimes.