Ellison to Leave Federal Custody Early
Caroline Ellison, former CEO of Alameda Research, is expected to leave federal custody in early 2026. According to the US Bureau of Prisons, Ellison is to be set free on January 21, 2026, roughly 10 months earlier than the full term of her two-year sentence.
Ellison admitted wrongdoing in the massive crypto fraud case and struck a deal to provide evidence against Sam Bankman-Fried, the ex-FTX head. Bankman-Fried was found guilty in March 2024 and sentenced to 25 years in prison.
Early Release
The reduction in Ellison’s sentence comes from both early release credits and prosecutors’ assessment of her assistance during the FTX collapse probe. She will walk free after just 15 months behind bars.
Her testimony revealed that Bankman-Fried held final authority over Alameda’s key moves. Ellison also disclosed how FTX customer money was transferred to Alameda to offset losses and fund risky ventures that eventually collapsed.
Role in FTX Collapse
At the time the exchange failed, Ellison was a co-CEO of Alameda Research, the trading arm that operated in close coordination with the FTX exchange. In December 2022, Ellison admitted guilt to multiple fraud and conspiracy charges tied to the misuse of customer deposits.
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The platform’s failure left billions of dollars in customer funds unaccounted for, producing a ripple effect that shook up confidence across the digital asset market. Ellison’s official custodial status changed in October 2025, when she was moved out of a federal prison facility and placed into community confinement.
Judge Lewis Kaplan handed down her two-year sentence in September 2024, along with an $11 billion forfeiture order. Though he called her ‘deeply responsible’ for the fraud, he noted her cooperation set her apart from Bankman-Fried.
As Ellison nears her release, it’s clear that her cooperation has had a significant impact on her sentence. The value of her testimony has been recognized by prosecutors, and her early release reflects this. For those affected by the FTX collapse, Ellison’s cooperation may provide some sense of closure, but the road to recovery will likely be long and complex.
Ellison’s release date is now set, and she will soon be free from federal custody.
