Caroline Ellison Moved to Community Confinement After 11 Months in Prison

Caroline Ellison has been transferred from a federal prison to community confinement after serving roughly eleven months of her two-year sentence tied to the collapse of FTX. Records from the Federal Bureau of Prisons show she was moved on October 16 from Danbury Federal Correctional Institution in Connecticut and is now placed either in home confinement or a halfway house.

Early Transfer Shortens Original Sentence

Ellison’s projected release date is February 20, 2026, nearly nine months earlier than the end of her original sentence. She began serving her term in early November 2024 after U.S. District Judge Lewis Kaplan sentenced her to two years in prison.

Cooperation Central to Sentence Reduction

Ellison pleaded guilty in December 2022 to multiple conspiracy charges, including wire fraud, money laundering, securities fraud, and commodities fraud, offenses that carried a potential maximum sentence of 110 years. During sentencing, Judge Kaplan highlighted her substantial cooperation with prosecutors while noting that the seriousness of the fraud still warranted prison time. At her September 2024 sentencing hearing, Ellison expressed remorse and acknowledged the damage caused to customers and investors.

Key Witness Against Sam Bankman-Fried

Prosecutors described Ellison’s testimony as critical to building the case against former FTX CEO Sam Bankman-Fried. They said her cooperation was essential in proving how the fraud operated and who directed it. Ellison testified over three days during Bankman-Fried’s criminal trial in October 2023, detailing how he instructed executives to misuse customer funds and how internal systems concealed the transfers.

Testimony Revealed Internal Pressure and Control

During her testimony, Ellison said Bankman-Fried directed Alameda Research to invest billions of dollars taken from FTX customers. She also spoke about their personal relationship, explaining that she often felt pressured and deferred to him due to his authority and influence within the company.

Diverging Outcomes for Other FTX Executives

Other former FTX executives have received different sentences. Former CTO Gary Wang and engineering director Nishad Singh were given time-served sentences with supervised release after cooperating and testifying against Bankman-Fried. Former FTX Digital Markets CEO Ryan Salame, who declined to cooperate, is serving a seven-year prison sentence in Maryland and has criticized the leniency shown to cooperating witnesses.

Bankman-Fried Continues to Contest Conviction

Sam Bankman-Fried is currently serving a 25-year sentence in a federal prison in California after being convicted on all seven fraud and conspiracy counts. His legal team is pursuing an appeal, arguing he did not receive a fair trial, while his family has called for presidential clemency. Bankman-Fried continues to claim FTX was never insolvent and that customers could have been repaid in full.

FTX Bankruptcy Distributions Ongoing

FTX creditors are continuing to receive bankruptcy distributions totaling more than $16 billion in recovered funds. The Federal Bureau of Prisons declined to comment on the specific conditions of Ellison’s community confinement, citing privacy and security concerns, and her legal team has not responded to requests for comment.