Former FTX Executive Caroline Ellison Set for Early Prison Release in the United States After Cooperating Against Sam Bankman-Fried

Just over a year after being sent to federal prison, Caroline Ellison is preparing to walk free. The former CEO of Alameda Research — and once the on-again, off-again girlfriend of disgraced crypto boss Sam Bankman-Fried — is scheduled for release in January, months earlier than many expected.

Federal Bureau of Prisons records show Ellison, now 31, is due to be released on January 21, 2026, cutting short a two-year sentence handed down in September 2024 for wire fraud and money laundering.

From the center of crypto to the center of a courtroom

Ellison was a central figure in the collapse of FTX, the crypto exchange that imploded in November 2022 after it emerged billions in customer funds had been secretly funneled into Alameda Research, the trading firm she ran.

She later admitted that Bankman-Fried illegally allowed Alameda to tap into FTX customer money almost without limit — a decision that proved catastrophic when markets turned and customers rushed to withdraw their funds.

The money wasn’t there. The exchange collapsed. And one of the biggest financial scandals in modern American history was born.

Guilty pleas, then a surprising sentence

Ellison pleaded guilty to fraud-related charges shortly after the collapse, facing a theoretical maximum sentence of more than a century behind bars. Many legal observers believed her cooperation would spare her prison entirely.

Instead, she was sentenced to two years — a punishment that stunned some experts, even as the judge acknowledged her assistance to prosecutors.

She initially served time in a federal facility in Connecticut before being transferred to community confinement in October 2025, meaning house arrest or placement in a halfway house.

The cooperation that changed everything

Ellison’s role shifted dramatically in 2023, when she became the prosecution’s most important witness at Bankman-Fried’s trial.

Over three days of testimony, she laid bare the inner workings of FTX and Alameda, calmly explaining how billions in customer money were used to cover risky bets, repay lenders, and bankroll lavish spending.

She told jurors that Bankman-Fried “directed” her to commit fraud and said he explicitly authorized taking up to $14 billion from FTX customers to keep Alameda afloat.

Seven balance sheets and one collapsing illusion

One of the most damaging revelations involved a desperate attempt to calm lenders as the crypto market soured in mid-2022.

Ellison testified that she was instructed to prepare seven different versions of Alameda’s balance sheet after Genesis, a major lender, demanded repayment of a $500 million loan. The documents painted wildly different financial pictures.

She ultimately sent what she called “alternative seven” — a version that massively inflated Alameda’s assets while hiding its true liabilities. Prosecutors showed that Bankman-Fried had opened the document himself, though he later denied telling her to send it.

A relationship that blurred every boundary

The trial also pulled back the curtain on Ellison’s personal relationship with Bankman-Fried, which overlapped uncomfortably with their professional lives.

They dated from 2020 to 2021, during which time he was both her romantic partner and her boss. Ellison told the court that dynamic created tension and insecurity, describing him as distant and emotionally unavailable.

Those days on the witness stand drew packed galleries, as the courtroom absorbed the strange mix of personal vulnerability and staggering financial deceit.

Regret, remorse, and a public reckoning

At her own sentencing, Ellison broke down as she addressed the court, apologizing for her role in the fraud and for failing to stop it when she could.

“I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us,” she said, fighting tears. “Not a day goes by that I don’t think about all of the people I hurt.”

She cried throughout her remarks, visibly shaken by the scale of the damage she helped cause.

A lifetime ban from the industry she helped ruin

Earlier this month, Ellison also agreed to a sweeping professional penalty — a 10-year ban on serving as an officer or director of any cryptocurrency exchange or public company.

It effectively closes the door on the industry that once valued FTX at $32 billion and treated its executives as visionaries.

A backstory rooted in elite finance

Long before the collapse, Ellison’s path seemed almost preordained. The daughter of two MIT professors, she met Bankman-Fried in 2015 while working at Jane Street Capital. He was already a trader. She was still a Stanford student.

They crossed paths again in 2017 at a Bay Area coffee shop, where Bankman-Fried pitched his new venture, Alameda Research. Ellison joined soon after, calling it a “blind leap into the unknown.”

Freedom for one, uncertainty for another

As Ellison prepares to leave confinement less than four years after first pleading guilty, Bankman-Fried remains behind bars — and increasingly vocal.

He has begun seeking clemency from President Trump, claiming his prosecution was politically motivated by what he describes as an anti-crypto Biden administration.

One former partner is nearing freedom. The other is still fighting for it.

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