Caroline Ellison leaves prison. The former CEO of Alameda Research and a key figure in the FTX scandal is no longer behind bars.
Records from the U.S. Bureau of Prisons show that Ellison has been transferred from federal prison to Residential Reentry Management (RRM) in New York. This signifies a shift: from incarceration to community supervision.
What does RRM status really mean?
According to the Bureau of Prisons inmate search, Ellison remains under federal supervision with a planned release date of February 20, 2026. However, her current status confirms that she is no longer incarcerated.
The status of RRM — or Residential Reentry Management — oversees the final stage of serving a federal sentence. Individuals under RRM may stay in a halfway house or home confinement, rather than in prison.
Individuals under the supervision of the Bureau of Prisons face fewer restrictions and may work, maintain limited contacts, and prepare for reintegration into society.
Unlike prison, staying in RRM involves no cells, no guards, and much greater freedom. However, strict monitoring and movement restrictions still apply.
Ellison's transfer means she has begun the readjustment phase and has not been fully released.
Caroline Ellison's role in the FTX collapse
Ellison pleaded guilty in 2022 to multiple federal fraud charges related to the misuse of FTX customer funds.
As CEO of Alameda Research, linked to FTX, she admitted to executing transactions and financial activities based on billions of USD in customer deposits.
Prosecutors and the court clearly separated Ellison's role from that of FTX founder Sam Bankman-Fried, who designed systems that enabled fraud. Ellison did not control the infrastructure of the FTX exchange, the mechanisms for storing customer funds, or management.
Her cooperation was key. Ellison became the government's main witness, and her extensive testimony helped convict Bankman-Fried. In 2024, a federal judge sentenced her to two years in prison, factoring in her cooperation, prompt admission of guilt, and secondary role.
A stark contrast to Do Kwon
Ellison's release from prison comes as Terraform Labs co-founder Do Kwon begins serving a 15-year federal sentence in the U.S. for fraud related to the collapse of the stablecoin TerraUSD.
Prosecutors argued that Kwon knowingly misled investors about the stability of the algorithmic peg of Terra, leading to losses estimated at over 40 billion USD.
In contrast to Ellison, Kwon was a founder, public promoter, and architect of the system at the center of the collapse. The difference in sentences shows how courts distinguish between system designers and operators.
Caroline Ellison is released from prison: Too lenient or lawful?
Ellison's transition to community supervision is legally routine but politically charged. Critics see this as confirmation of unequal accountability in cryptocurrency scandals.
Prosecutors argue that the sentence reflects the principles of sentencing: cooperation, lesser power, and acceptance of guilt.
Currently, Ellison remains under federal supervision. Her release from prison, even temporarily, raises the question again — who really bears the consequences when crypto empires fall?
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