Caroline Ellison Released After 440 Days in Federal Custody

Caroline Ellison, the former co-CEO of Alameda Research and a central figure in the collapse of cryptocurrency exchange FTX, is expected to be released from federal custody on Wednesday after serving roughly 440 days of a two-year prison sentence.

Her early release comes approximately ten months ahead of her original projected term and reflects credit for cooperation with prosecutors and good conduct while incarcerated. Ellison, 31, is scheduled to exit from a residential reentry management facility in New York, where she has been held in community confinement since late 2025.

Ellison began serving her sentence in November 2024 at a federal facility in Connecticut before being transferred to community confinement. Her release marks the conclusion of a legal journey that began with her guilty plea in December 2022 to multiple fraud and conspiracy charges.

The U.S. Federal Bureau of Prisons data confirms her release timeline, which was shortened due to standard federal sentencing credits. These credits are typically awarded for cooperation with authorities and maintaining good behavior during incarceration.

Her sentence was significantly reduced from the original projection due to several factors:

• Extensive cooperation with federal prosecutors
• Good conduct while incarcerated
• Testimony provided during Sam Bankman-Fried's trial
• Participation in the residential reentry program

As part of her plea agreement, Ellison cooperated extensively with federal authorities and testified against former FTX CEO Sam Bankman-Fried during his criminal trial in 2023. Her testimony provided crucial details about how Alameda and FTX commingled customer assets and concealed financial losses.

Ellison's evidence revealed that Alameda Research relied on an effectively unlimited line of credit that allowed the firm to draw directly from FTX customer deposits. This arrangement played a central role in the multibillion-dollar hole that ultimately triggered FTX's collapse in November 2022.

Her testimony detailed how Alameda and FTX commingled customer assets, concealed financial losses, and relied on an effectively unlimited line of credit that allowed Alameda to draw directly from FTX customer deposits.

The FTX collapse stands as one of the largest bankruptcies in the history of the crypto industry, exposing systemic failures in cryptocurrency exchange operations and risk management practices.

Ellison's cooperation proved instrumental in the conviction of Sam Bankman-Fried, who was sentenced in March 2025 to nearly 25 years in prison. The evidence she provided helped establish key elements of the fraud case against the former FTX CEO.

Bankman-Fried was also ordered to forfeit up to $11 billion in assets to compensate investors and lenders who lost funds in the exchange's collapse. The substantial forfeiture order reflects the scale of financial damage caused by the fraud.

The relationship between Ellison and Bankman-Fried extended beyond their professional roles. They reportedly had an on-again, off-again romantic relationship and lived together with other FTX executives in a Bahamian penthouse while working closely at Alameda Research.

Federal regulators have imposed significant long-term restrictions on Ellison's future business activities. She has been barred from serving as an officer or director of a public company or cryptocurrency exchange for ten years.

The Securities and Exchange Commission has sought similar prohibitions against other former FTX executives who cooperated with authorities. These include former CTO Gary Wang and ex-engineering head Nishad Singh, both of whom avoided prison time but face comparable restrictions on their professional activities.

These regulatory actions represent part of a broader effort to establish accountability and prevent similar misconduct in the cryptocurrency industry. The restrictions are designed to protect investors and maintain market integrity by limiting the involvement of individuals associated with significant fraud cases.

Ellison's release marks a significant milestone in the aftermath of the FTX scandal, which fundamentally reshaped the cryptocurrency landscape and prompted increased regulatory scrutiny of digital asset exchanges.

Her case highlights the importance of cooperation with authorities in complex financial fraud investigations. The substantial reduction in her sentence compared to Bankman-Fried's nearly 25-year term demonstrates the value prosecutors place on testimony that helps secure convictions against primary perpetrators.

As Ellison reenters society, her experience serves as a cautionary tale about the consequences of financial misconduct and the critical role of internal controls and ethical leadership in cryptocurrency operations. The industry continues to grapple with the fallout from the FTX collapse while implementing new safeguards to prevent similar failures.