Caroline Ellison, the former chief executive of Alameda Research whose testimony was pivotal in convicting crypto fraudster Sam Bankman-Fried, is scheduled to walk free from custody in January 2026. This release will come just over a year into her two-year prison sentence for her central role in the multi-billion dollar FTX collapse.
From Prison to Community Confinement
According to Federal Bureau of Prisons records, Ellison is due for release on January 21, 2026. The 31-year-old was sentenced in September 2024 after pleading guilty to charges of wire fraud and money laundering, admitting she helped Bankman-Fried's FTX platform steal billions from its clients. After serving 11 months of her sentence in a federal prison in Connecticut, she was transferred to community confinement in October 2025, as first reported by Business Insider.
Community confinement means Ellison is either under house arrest or residing in a halfway house. Her impending freedom arrives less than four years after she initially pleaded guilty to a slew of charges connected to the implosion of the cryptocurrency exchange.
The Star Witness Who Brought Down SBF
Ellison's journey from co-conspirator to cooperating witness defined the landmark trial. As the former on-and-off girlfriend of Sam Bankman-Fried, she became the prosecution's star witness in his 2023 trial. Her three days of emotional testimony proved crucial in securing his conviction.
She confessed to knowingly engaging in illegal tactics with the disgraced FTX founder, telling jurors he directed her to commit fraud. Ellison revealed that Bankman-Fried instructed her to take $14 billion from FTX customers to repay massive loans Alameda had accrued for risky trades. She stated Alameda used FTX client deposits for "whatever" it needed, describing having 'unlimited' access to customer funds.
Her cooperation was extensive. She detailed how, at Bankman-Fried's direction, she drafted seven different balance sheets to mislead lenders like Genesis about Alameda's true financial health, inflating assets and downplaying liabilities by billions of dollars.
A Sentence That Surprised Experts
Ellison's two-year sentence was notably lenient, surprising many legal observers. She had faced a potential maximum of 115 years after pleading guilty to seven charges in late 2022. Prior to her sentencing, John J Ray, the CEO of the FTX bankruptcy estate, urged the judge to avoid prison time, crediting Ellison with providing "valuable assistance" that led to the recovery of hundreds of millions of dollars for creditors.
In a recent development, following her move to community confinement, Ellison agreed to a 10-year ban on serving as an officer or director of any cryptocurrency exchange or public company.
During her own sentencing hearing, Ellison grew emotional, expressing profound remorse. "I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us," she said. "Not a day goes by that I don’t think about all of the people I hurt."
While Ellison prepares for freedom, Sam Bankman-Fried remains incarcerated and has reportedly been seeking clemency from former President Donald Trump, claiming his prosecution was politically motivated.
