Caroline Ellison, the former co-CEO of Alameda Research and a pivotal figure in the downfall of the cryptocurrency exchange FTX, is slated for release from federal custody on Wednesday. This early release follows approximately 440 days served of a two-year prison sentence, according to data from the U.S. Federal Bureau of Prisons.

Ellison, 31, has been held in community confinement since late 2025 at a residential reentry management facility, often referred to as a halfway house, located in New York. Her projected release is notably about ten months ahead of her initial term, a testament to her extensive cooperation with prosecutors and her commendable conduct during incarceration.

Ellison received her two-year prison sentence in September 2024, having pleaded guilty in December 2022 to a series of fraud and conspiracy charges. These charges were directly linked to the illicit misuse of customer funds at FTX and its affiliated trading firm, Alameda Research. She commenced her prison term in November 2024 at a federal facility situated in Connecticut, prior to her transfer into community confinement.

Her cooperation played a crucial role in the federal investigation and subsequent prosecution. As part of her plea agreement, Ellison provided extensive assistance to federal authorities, culminating in her testimony against former FTX CEO Sam Bankman-Fried during his criminal trial in 2023.

During her testimony, Ellison meticulously detailed how Alameda and FTX engaged in the commingling of customer assets, actively concealed significant financial losses, and operated with an effectively unlimited line of credit. This credit allowed Alameda to directly access and utilize deposits from FTX customers. This compelling evidence proved instrumental in securing Bankman-Fried’s conviction on multiple fraud charges. Consequently, he was sentenced in March 2025 to nearly 25 years in prison and mandated to forfeit up to $11 billion in assets, intended for the compensation of investors and lenders.

In addition to her prison sentence, federal regulators have imposed a ten-year ban on Ellison, prohibiting her from serving as an officer or director of any public company or cryptocurrency exchange. The Securities and Exchange Commission has also pursued similar prohibitions against other former FTX executives who collaborated with authorities, including former CTO Gary Wang and ex-engineering head Nishad Singh, both of whom were spared prison time.

The collapse of FTX occurred in November 2022, triggered by a severe liquidity crisis that exposed a multibillion-dollar deficit in its balance balance sheet. This event led to one of the largest bankruptcies recorded in the history of the cryptocurrency industry. It was also reported that Sam Bankman-Fried and Caroline Ellison maintained an on-again, off-again romantic and professional relationship, residing together with other FTX executives in a Bahamian penthouse while closely working at Alameda Research.