Caroline Ellison, Key Figure in FTX Collapse, Released from Federal Custody After Serving 14 Months in Prison

New York, January 22, 2026 - Caroline Ellison, the former CEO of Alameda Research and a central figure in the dramatic 2022 collapse of cryptocurrency exchange FTX, has been released from federal custody. The 31-year-old completed approximately 440 days - roughly 14 months - of her original two-year prison sentence, walking free on January 21, 2026, according to records from the U.S. Federal Bureau of Prisons (BOP) and multiple reports.

Ellison began her sentence in November 2024 at the Federal Correctional Institution in Danbury, Connecticut. She was later transferred to community confinement - commonly a halfway house or residential reentry facility - in New York City in October 2025. Her release marks the end of her custodial period, though she now enters supervised release as part of her sentence. Initial BOP projections had listed a February 20, 2026, release date, but credits for good behavior and her substantial cooperation with authorities appear to have advanced the timeline by about a month.

Ellison pleaded guilty in late 2022 to multiple felony charges, including wire fraud, securities fraud, and conspiracy to commit money laundering, stemming from her role in misusing billions in FTX customer funds at Alameda Research, the hedge fund she co-led. As the ex-partner of FTX founder Sam Bankman-Fried, she became one of the government's most important cooperating witnesses. Her testimony during Bankman-Fried's 2023 trial helped secure his conviction on fraud charges; he is currently serving a 25-year federal prison sentence.

Legal and regulatory consequences extend beyond prison time. As part of settlements with the U.S. Securities and Exchange Commission (SEC), Ellison faces a 10-year ban from serving as an officer or director at any public company or cryptocurrency exchange. Similar but shorter bans (typically 5–8 years) apply to other former FTX/Alameda executives who also cooperated, such as Gary Wang and Nishad Singh.

Crypto journalist Tiffany Fong highlighted the release in a widely shared post on X (formerly Twitter) on January 22, 2026, accompanied by a video recap of Ellison's guilty plea, trial involvement, and sentencing. The post noted the perceived leniency for cooperators compared to Bankman-Fried's punishment and promoted Fong's services helping FTX victims pursue claim purchases for faster bankruptcy payouts.

Ellison's early release has sparked mixed reactions in the crypto community, with some users on X questioning the relatively short time served given the scale of the FTX fraud - which involved the misuse of over $8 billion in customer assets - while others pointed to the value of her cooperation in recovering funds for creditors and aiding prosecutions.

She now transitions to life outside custody under supervision, barred from leadership roles in the industries she once helped shape. The FTX bankruptcy proceedings continue, with ongoing distributions to victims expected in the coming months and years.