Caroline Ellison Update: What Happens To Alameda Research Ex-CEO After Sam Bankman-Fried's Arrest

Following the arrest and detainment of Sam Bankman-Fried, the founder and former CEO of FTX, the public is now shifting its focus to Caroline Ellison, his rumored ex-girlfriend and former CEO of the crypto trading firm Alameda Research. Many people are now wondering what will happen to her and where she's currently staying.

A few days before Bankman-Fried was arrested by the Royal Bahamas Police Force, Ellison was reportedly spotted in a Manhattan coffee shop.

After that sighting, news broke out that she hired former U.S. Securities and Exchange Commission (SEC) Enforcement Director Stephanie Avakian and the law firm WilmerHale to represent her.

Where is Ellison now?

The New York Post went to the home of Ellison's parents in Newton, Massachusetts, last week to get a comment about their daughter.

Sara and Glenn Ellison, who are both Massachusetts Institute of Technology economists, were reportedly too "busy" to answer the question of whether their daughter was working with prosecutors amid the FTX fiasco.

The outlet also noted that one of the couple's neighbors claimed they haven't seen the former Alameda Research CEO "since around Thanksgiving."

While Ellison's whereabouts remain unknown, there are speculations that she might be in New York telling on Bankman-Fried and cutting a deal with the prosecutors.

Seasoned lawyers think it is in Ellison's best interest to cooperate with the investigation.

"For someone like Ellison who was in SBF's inner circle and who has already publicly implicated herself, there is a strong incentive to cooperate early," Moira Penza, former federal prosecutor in the Eastern District of New York, told the New York Post.

"It is not unheard of in [the Southern District of New York] for people who cooperate and who would otherwise be facing a decade or more in prison to instead be sentenced to time served," Penza added.

Former SEC lawyer Harold Fischer believes Ellison may have cut a deal with the authorities to save herself.

"She would have among the greatest incentives to cooperate, as it was seeming likely that in his effort to exculpate himself, Bankman-Fried would try to finger her," he said, as per a separate report from the outlet.

The former SEC lawyer also said that "someone relatively senior is cooperating with the federal authorities in exchange for leniency for their potential misconduct" considering "the speed of the indictment and the breadth of the charges" brought against Bankman-Fried.

"It is possible Bankman-Fried's publicity tour, in which he repeatedly disclaimed either knowledge of — or responsibility for — mishandling or theft of customer assets, spurred senior officers to fear that he would specifically blame them," Fischer added.

"Often, the first to the table gets the most lenient treatment, so it is smart to turn before others have the chance to," he said further.

Unlike Bankman-Fried, who spoke up on various platforms before his infamous arrest in the Bahamas on Dec. 12, Ellison, Gary Wang and Nashid Singh — individuals believed to be in the former FTX CEO's inner circle — have remained silent.