Caroline Ellison, Ex-Alameda CEO and Sam Bankman-Fried Associate, Quietly Transferred Out of Prison Ahead of Schedule

Caroline Ellison, the former CEO of Alameda Research and ex-girlfriend of FTX founder Sam Bankman-Fried, has been quietly transferred out of federal prison after serving approximately 11 months of her two-year sentence, according to Business Insider.

The Federal Bureau of Prisons (BOP) confirmed that Ellison, 31, was moved on October 16 from the Danbury Federal Correctional Institution in Connecticut to community confinement, which includes either under home confinement or a place in a halfway home, still under federal supervision.

A BOP spokesperson declined to provide further details, citing privacy and security concerns. Publicly available prison records indicate Ellison’s projected release date as February 20, 2026, suggesting her transfer occurred several months earlier than originally scheduled. Notably, neither Ellison’s lawyers nor federal authorities have commented publicly on the reasoning behind her early move.

Ellison reported to prison in November 2024, following her conviction for involvement in the FTX and Alameda fraud scheme. Prosecutors accused the former hedge fund executive of helping divert between $8 billion and $11 billion in customer funds from FTX to Alameda Research to cover risky trades and losses.

She pleaded guilty in December 2022 to seven felony counts, including fraud and conspiracy, and subsequently became a key cooperating witness in the prosecution of Bankman-Fried. Her testimony detailed how she falsified Alameda’s balance sheets, manipulated financial records, and used FTX customer deposits to cover shortfalls.

During FTX’s criminal trial, Ellison’s cooperation was extensively cited, with Judge Lewis Kaplan acknowledging her “substantial assistance” in bringing other figures to justice. Nevertheless, Kaplan rejected her legal team’s request for here to avoid prison entirely, describing full leniency as a “literal get-out-of-jail-free card.”

Cooperation and the Wider FTX Fallout

Ellison’s sentence was lighter than those of non-cooperating executives but aligned with the broader pattern of plea deals within FTX’s inner circle. Gary Wang, FTX’s co-founder, and Nishad Singh, former head of engineering, received time served for extensive cooperation. In contrast, executives who declined to cooperate faced harsher consequences: Ryan Salame was sentenced to 7.5 years in prison.

Meanwhile, Bankman-Fried himself received a 25-year sentence in March 2024 after being convicted on all counts of fraud and conspiracy related to the FTX collapse. He is currently incarcerated in a low-security federal facility in San Pedro, California, while pursuing appeals of both his conviction and sentence.

Ellison’s early and discreet release raises new questions among observers of the FTX saga. Legal analysts note that community confinement transfers are not unusual, particularly for inmates who demonstrate good behavior or substantial cooperation.

However, the lack of public explanation—combined with her role as a high-profile witness—has fueled curiosity and speculation within the crypto and legal communities.

Her legal team has remained silent, declining to comment on why the transfer occurred ahead of schedule, leaving some to question whether it reflects procedural discretion, reward for cooperation, or other mitigating factors.

A New Chapter in the FTX Legal Legacy

Ellison’s transfer marks a significant development in the ongoing legal aftermath of the FTX collapse, a scandal that sent shockwaves through the cryptocurrency industry in November 2022 when it was revealed that billions in customer funds were secretly diverted to Alameda Research to cover trading losses and risky bets.

For the crypto ecosystem, her release may signal the closing stages of federal prosecutions against FTX’s cooperative insiders, while the remaining non-cooperating figures continue to serve sentences.

Ellison’s quiet exit also underscores the sensitive balance the federal system maintains when handling high-profile cooperative witnesses.

Caroline Ellison’s early transfer, conducted quietly and without public comment, highlights the complexities of federal sentencing in white-collar crypto cases.

While her cooperation undoubtedly contributed to successful prosecutions, the lack of transparency fuels speculation. From a broader industry perspective, this episode reminds investors and executives that even top-level crypto operators are subject to scrutiny—but strategic cooperation can meaningfully alter outcomes.