Caroline Ellison, the former CEO of Alameda Research and a key figure in the FTX scandal, is no longer in prison.
According to records from the Federal Bureau of Prisons, Ellison was transferred from federal prison to the Residential Reentry Management (RRM) in New York. This means she has entered the transition process from classic prison to society.
What Does RRM Status Really Mean?
The Bureau of Prisons' inmate inquiry system shows that Ellison is still under federal supervision and that her estimated release date is February 20, 2026. However, based on her current status, it is clearly confirmed that she is no longer housed in a correctional facility.
RRM — or Residential Reentry Management — oversees the final phase of federal sentences. During this period, individuals typically serve their sentences in a halfway house or home confinement and are no longer held behind prison walls.
Since federal supervision is ongoing, his prison sentence is not considered over. However, physical restrictions are decreasing: going to work, limited social interactions, and preparing to reintegrate into society are becoming possible.
Unlike prison, during the RRM period, there are neither cells nor guards; the control over the individual is much less. Of course, close monitoring and movement restrictions are still in effect.
Ellison's new status indicates that he is in the process of returning from his sentence, but it does not mean he is completely free.
Ellison's Role in the FTX Collapse
In 2022, Ellison accepted multiple federal fraud charges related to the misuse of FTX user funds.
As the CEO of Alameda Research, an integral part of FTX, he admitted to personally managing transactions and financial maneuvers based on billions of dollars in customer deposits.
However, prosecutors and the court emphasized that there is a significant difference between Ellison's role and that of FTX founder Sam Bankman-Fried. Bankman-Fried was the one who devised the systems that enabled the fraud. Ellison was not responsible for the infrastructure of the FTX cryptocurrency exchange, the control of customer funds, or its governance.
His cooperation changed the course of events. Ellison became the government's most important witness; he provided detailed statements that paved the way for Bankman-Fried's conviction. In 2024, a federal judge sentenced him to two years in prison due to his cooperation, early acceptance of guilt, and being in a subordinate position.
A Sharp Contrast with Do Kwon
Ellison's release from prison coincided with the 15-year federal prison sentence initiated by Do Kwon, co-founder of Terraform Labs, due to fraud related to the collapse of the TerraUSD stablecoin.
According to prosecutors, Kwon knowingly misled investors about the reliability of Terra's algorithmic stablecoin, leading to losses exceeding forty billion dollars.
Unlike Ellison, Kwon was the architect of the system and the publicly known face. This difference in punishment shows that the courts evaluated the designers and operators of the system differently.
Very Light, Legally Compliant?
Although Ellison's transition to society is legally routine, it is politically controversial. Critics argue that this situation reinforces the perception that equal responsibility is often not ensured in cryptocurrency scandals.
Prosecutors stated that this practice reflects established sentencing principles: cooperation, low level of authority, and acceptance of responsibility.
Ellison is still under federal supervision for now. However, whether short-term or long-term, his release from prison has brought up an old question in many people's minds: Who actually pays the price when cryptocurrency empires collapse?
