Caroline Ellison, the former CEO of Alameda Research and a central figure in the FTX scandal, is no longer incarcerated.
Data from the US Bureau of Prisons shows that Ellison has been transferred from a federal prison to Residential Reentry Management (RRM) in New York. This indicates a transition from confinement to community supervision.
What RRM status really means
According to the Bureau of Prisons inmate locator, Ellison remains under federal supervision, with a projected release date of February 20, 2026. However, her current status confirms that she is no longer residing in a detention center.
RRM — the abbreviation for Residential Reentry Management — guides the final phase of a federal prison sentence. Someone under RRM can be placed in a halfway house or under house arrest, instead of in a prison.
Although the Bureau of Prisons still maintains supervision, these individuals have fewer physical restrictions. They are often allowed to work, have limited social contact, and prepare for their return to society.
In contrast to a prison, there are no cells, no guards, and much more independence at RRM, although strict supervision remains and strict rules apply for movements.
Ellison's transfer means she has entered the reintegration process of her sentence. She is therefore not released.
Ellison's role in the FTX collapse
Ellison pleaded guilty in 2022 to multiple federal fraud charges surrounding the misuse of FTX customer funds.
As CEO of Alameda Research, the trading division closely linked to FTX, she admitted to executing transactions and financial actions based on billions in customer funds.
Still, prosecutors and the court made a clear distinction between Ellison's role and that of FTX founder Sam Bankman-Fried, who designed the systems that made the fraud possible. Ellison had no control over the infrastructure of the FTX platform, customer funds, or its management.
Her cooperation was crucial. Ellison became the main witness for the U.S. government, and her extensive testimony helped convict Bankman-Fried. In 2024, she received a two-year prison sentence from a federal judge, taking into account her assistance, early guilty plea, and subordinate role.
A stark contrast to Do Kwon
Ellison's departure from prison occurs while Terraform Labs co-founder Do Kwon begins a federal prison sentence of 15 years for fraud surrounding the collapse of the TerraUSD stablecoin.
According to prosecutors, Kwon intentionally misled investors about the stability of Terra's algorithmically linked coin. This resulted in losses of more than $40 billion.
Unlike Ellison, Kwon was a founder, public promoter, and chief architect of the system that collapsed. The difference in the imposed sentences shows how judges distinguish between designers of systems and those who execute them.
Too lenient or legally consistent?
Ellison's transition to supervision outside of prison is legally routine but politically sensitive. For critics, it confirms the idea that there is inequality in accountability in crypto scandals.
For prosecutors, this fits within the existing principles: cooperation with justice, diminished power position, and taking responsibility.
For now, Ellison remains under federal supervision. But her departure from prison, even if temporary, raises the question again: who really pays the price when crypto empires collapse?
