Caroline Ellison, former chief executive of Alameda Research and a central witness in the U.S. government’s case against FTX founder Sam Bankman-Fried, has been transferred out of federal prison just 11 months into her two-year sentence, according to new information confirmed by the Federal Bureau of Prisons.
What Happened
Ellison, 31, was moved on October 16 from the Danbury Federal Correctional Institution in Connecticut into community confinement, a transitional status that keeps her in federal custody but places her either in a halfway house or under home confinement, Business Insider reported.
The Bureau of Prisons declined to disclose which arrangement applies, citing safety and privacy policies.
Online records now list her projected release date as February 20, 2026, nearly nine months earlier than originally scheduled.
Her attorneys did not comment on the transfer.
Why It Matters
Ellison entered the Danbury facility in November 2024 after receiving a two-year sentence for her role in the multibillion-dollar scheme that toppled FTX and Alameda Research.
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She pleaded guilty to conspiring with Bankman-Fried to misuse billions of dollars in customer funds, and later became the prosecution’s most consequential witness during his 2023 criminal trial.
On the stand, Ellison detailed how the companies secretly deployed FTX customer assets to fund risky investments and operational losses, a narrative that prosecutors said corroborated internal records and communications.
Her cooperation was repeatedly highlighted by the government, and U.S. District Judge Lewis Kaplan acknowledged it as “substantial” at sentencing, though he said the seriousness of the fraud required incarceration despite her request for no prison time.
Before receiving her sentence, Ellison apologized in court, saying she struggled to comprehend the scale of the harm caused.
Bankman-Fried is currently serving a 25-year sentence at a low-security federal prison in San Pedro, California while appealing both his conviction and the length of his sentence.
Ellison’s early move into community confinement marks one of the final stages of federal custody and often precedes supervised release.
As with all inmates, the Bureau of Prisons did not comment on the criteria or rationale behind her transfer.
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