Caroline Ellison was released from prison on Wednesday after serving approximately 60 percent of her two-year sentence. The former co-CEO of Alameda Research played a key role in the events leading to the collapse of the crypto exchange FTX.
Before Ellison's release, the U.S. Securities and Exchange Commission (SEC) banned her from holding a senior position for ten years.
Early release surprises the community
According to the U.S. Federal Bureau of Prisons, the 31-year-old now lives in a transitional facility in New York. There, she remains as part of her return to a normal life. Such centers help former inmates, among other things, with job searching and reintegration into everyday life.
Ellison was taken to the facility in October 2025. Before that, she was housed in a federal prison in Connecticut, where she began her two-year sentence in November 2024.
She was released about ten months earlier than expected. The reason was reduced penalties due to her cooperation with investigators and rules in prison.
In a statement from the SEC, Ellison was banned from serving as a director or executive at publicly traded companies for ten years.
The authority referred to previous complaints. According to these, Ellison played a central role in misleading investors. She helped raise over 1,800,000,000 USD for FTX by portraying the exchange as a safe platform for crypto trading.
The SEC pursued similar bans against other former FTX managers who assisted in the investigations, including former CTO Gary Wang and former chief technology officer Nishad Singh. Both did not have to go to prison despite their involvement.
Reactions to Ellison's early release were mixed on crypto Twitter.
Divided opinions on the Ellison verdict
Some observers wondered if Ellison's sentence was too lenient given the damage to the crypto industry.
FTX founder and former CEO Sam Bankman-Fried continues to sit in prison serving a 25-year sentence.
Although both played a central role in the FTX collapse, Ellison and Bankman-Fried handled the charges differently.
Bankman-Fried pleaded not guilty and went to trial. A jury later convicted him of fraud and other serious crimes, including conspiracy and misuse of customer funds.
Ellison pleaded guilty and cooperated with investigators. This led to a significantly reduced sentence.
In her testimony, Ellison explained that Alameda Research and FTX improperly mixed customer funds, hid growing losses, and used a loan agreement that gave Alameda direct access to FTX customer deposits.
With Ellison's release, the legal chapter for the executives of FTX and Alameda Research is practically closed. Their actions contributed to triggering the crypto winter of 2022.
For Bankman-Fried, an early release is virtually ruled out.
In a recent interview, US President Donald Trump stated that he does not intend to pardon Bankman-Fried. Although Bankman-Fried has appealed his conviction, the chances for a new trial are very low.
