Caroline Ellison

Caroline Ellison
Born:	November 1994 Boston, Massachusetts
Charges:	Wire fraud, Conspiracy to commit wire fraud, Securities fraud, Conspiracy to commit securities fraud, Conspiracy to commit money laundering
Sentence:	24 months
Facility:	Community Confinement (as of October 2025)
Status:	Community Confinement - Early Release January 2026

Caroline Ellison (born November 1994) is an American former business executive who served as CEO of Alameda Research, a cryptocurrency trading firm affiliated with the FTX exchange. Following the collapse of FTX in November 2022—one of the largest financial frauds in American history—Ellison pleaded guilty to multiple fraud charges and became a key government witness in the prosecution of FTX founder Sam Bankman-Fried.

On September 24, 2024, Ellison was sentenced to two years in federal prison. Despite facing a potential sentence exceeding 100 years, her extensive cooperation with prosecutors resulted in a dramatically reduced sentence. She was also ordered to forfeit $11 billion, will be barred from serving as an officer or director of any public company for 10 years as part of a settlement with the SEC, and will serve three years of supervised release following her incarceration.

UPDATE (December 2025): Ellison has been moved to community confinement (a halfway house or home confinement) as of October 16, 2025. Her projected release date is January 21, 2026—approximately 10 months earlier than her original July 2026 projection. This early transition reflects her exceptional cooperation with federal prosecutors and good conduct credits under the First Step Act.

Summary

Caroline Ellison's role in the FTX collapse centered on her position as CEO of Alameda Research, the trading firm that received billions of dollars in FTX customer funds. Alameda, which was founded by Sam Bankman-Fried before FTX, was supposed to be an independent trading operation. In reality, Alameda had a secret line of credit from FTX that allowed it to borrow customer deposits without restriction or collateral.

When cryptocurrency markets declined in 2022, Alameda faced billions in losses. Rather than allow the firm to fail, Bankman-Fried directed Ellison to use FTX customer funds to cover Alameda's positions. Ellison also manipulated Alameda's balance sheets to hide the company's true financial condition from lenders and investors. When the scheme unraveled in November 2022, FTX customers lost access to approximately $8 billion in deposits.

Ellison pleaded guilty on December 19, 2022, and immediately began cooperating with federal prosecutors. Her testimony was instrumental in securing Bankman-Fried's conviction on all seven counts.

Background

Early Life and Education

Caroline Ellison was born in November 1994 in Boston, Massachusetts, to Glenn Ellison and Sara Fisher Ellison, both professors of economics at MIT. She grew up in Cambridge and Newton, Massachusetts, in an academically oriented household. Ellison has said she and her siblings learned Bayesian statistics in primary school, and at age 8, she gave her father an economic study of stuffed animal prices from Toys "R" Us as a birthday present.

Ellison demonstrated exceptional mathematical ability from an early age. In 2008, she received top honors in the American Mathematics Competitions. As a student at Newton North High School, she represented the United States at the 2011 International Linguistics Olympiad.

In 2016, Ellison graduated from Stanford University with a bachelor's degree in mathematics.

Career at Jane Street

After graduating from Stanford, Ellison joined Jane Street, a prominent quantitative trading firm in New York City. She spent 19 months as a junior trader, where she met Sam Bankman-Fried, who also worked at the firm. Both were part of the effective altruism movement, a philosophical community focused on using evidence and reason to do the most good.

Alameda Research

In March 2018, Ellison left Jane Street to join Alameda Research, the cryptocurrency trading firm Bankman-Fried had founded in 2017. She rose through the ranks as Alameda grew into one of the largest crypto trading operations in the world.

In October 2021, Ellison was promoted to co-CEO of Alameda Research alongside Sam Trabucco. When Trabucco stepped down in August 2022, citing burnout, Ellison became the sole CEO—a position she held when the company collapsed three months later.

Ellison was named to the Forbes 30 Under 30 list in 2022, shortly before FTX's implosion would reveal the fraud she had participated in.

Indictment, Prosecution, and Sentencing

The Collapse of FTX

FTX's collapse began in early November 2022 when CoinDesk published a report revealing that Alameda Research's balance sheet was heavily dependent on FTT, a cryptocurrency token created by FTX. The report suggested that Alameda and FTX were more intertwined than publicly disclosed.

Binance CEO Changpeng Zhao announced plans to sell Binance's holdings of FTT, triggering a bank run on FTX. Within days, FTX could not honor customer withdrawal requests, revealing that the exchange had used customer funds to prop up Alameda Research. FTX filed for bankruptcy on November 11, 2022.

Guilty Plea

On December 19, 2022, Caroline Ellison pleaded guilty in Manhattan federal court to seven counts:

• Two counts of wire fraud
• Two counts of conspiracy to commit wire fraud
• Securities fraud
• Conspiracy to commit securities fraud
• Conspiracy to commit money laundering

In her plea allocution, Ellison admitted to preparing false financial statements, lying to lenders, and helping to conceal the misuse of FTX customer funds.

Cooperation with Prosecutors

Ellison immediately became a cooperating witness for the government. Her cooperation was described by prosecutors as exceptional in both quality and quantity. She participated in numerous meetings with investigators, reviewed thousands of documents, and provided critical insights into the inner workings of FTX and Alameda.

At Sam Bankman-Fried's trial in October and November 2023, Ellison delivered devastating testimony over three days. She described how Bankman-Fried directed her to commit crimes, how they manipulated financial records, and how customer funds were misappropriated. She also testified about their personal relationship, which she said Bankman-Fried used to manipulate her.

Sentencing

On September 24, 2024, Judge Lewis Kaplan sentenced Caroline Ellison to two years in federal prison—far below the 110-year maximum she faced and below the federal sentencing guidelines. In explaining the sentence, Judge Kaplan praised Ellison's cooperation while noting that her crimes were serious and that some punishment was necessary to deter others.

Judge Kaplan stated that Ellison had "spilled the beans" on Bankman-Fried and that her testimony was crucial to his conviction. However, he emphasized that "there are important things for which Ms. Ellison must be held to account" and that the FTX case was "probably the greatest financial fraud perpetrated in the history of the U.S."

Ellison was also ordered to forfeit $11 billion, though the practical collectability of this amount is uncertain given her financial situation.

SEC Settlement

In addition to her criminal case, Ellison reached a settlement with the Securities and Exchange Commission. As part of this settlement, she agreed to a 10-year bar from serving as an officer or director of any publicly traded company. This bar restricts her from holding leadership positions at public companies until approximately 2034-2035.

Prison Experience

Surrender and Initial Designation

Caroline Ellison was ordered to surrender to federal custody on November 7, 2024. Judge Kaplan recommended that the Bureau of Prisons designate her to a minimum-security facility near Boston, where her family lives.

Ellison initially reported to FCI Danbury in Connecticut, a facility that houses both minimum and low-security female inmates.

Early Release and Community Confinement (2025)

On October 16, 2025, Caroline Ellison was moved from prison to community confinement. Community confinement can include a halfway house (Residential Reentry Center) or home confinement, and represents the final phase of a federal sentence before full release.

Her projected release date was moved from July 2026 to January 21, 2026—approximately 10 months earlier than originally projected. This significant sentence reduction reflects:

• Application of good conduct time credits under the First Step Act
• Her exceptional cooperation with federal prosecutors
• Early transition to community confinement per BOP guidelines (inmates are typically eligible for transfer 12 months or 10% of their sentence before release)

As of December 2025, Ellison remains in community confinement and is expected to complete her sentence in late January 2026, after which she will begin three years of supervised release.

Caroline Ellison Release Date Update (December 2025)

Caroline Ellison's release timeline has changed significantly since her September 2024 sentencing:

Date	Event	Status
September 24, 2024	Sentenced to 24 months	Original release projection: July 2026
November 7, 2024	Surrendered to FCI Danbury	Began serving sentence
October 16, 2025	Transferred to community confinement	Early transition (~11 months into sentence)
January 21, 2026	Projected release date	Will begin 3 years supervised release

The early release (approximately 10 months ahead of the original July 2026 projection) reflects:

• Good Conduct Time: Under the First Step Act, inmates can earn up to 54 days per year of good conduct time credits
• Exceptional Cooperation: Judge Kaplan noted her cooperation was "extraordinary" and "exceptional"
• Community Confinement Eligibility: The BOP typically transitions inmates to community confinement 12 months before release or 10% of their sentence, whichever is greater

Personal Life

Ellison was in an on-and-off romantic relationship with Sam Bankman-Fried from approximately 2018 to 2022. She testified at trial that the relationship was "complicated" and that Bankman-Fried could be manipulative.

Ellison was a member of the effective altruism community, which emphasizes using evidence and rational analysis to maximize positive impact. This philosophy drew both Ellison and Bankman-Fried to careers in finance, with the goal of earning money to donate to effective charities—a concept known as "earning to give."

Forbes 30 Under 30

Caroline Ellison was named to the Forbes 30 Under 30 list in 2022 for her role as co-CEO of Alameda Research. She is one of several Forbes 30 Under 30 honorees who later faced criminal prosecution, joining Elizabeth Holmes, Sam Bankman-Fried, Charlie Javice, and Martin Shkreli.

Terminology

• Alameda Research: A cryptocurrency trading firm founded by Sam Bankman-Fried in 2017, which collapsed alongside FTX in November 2022.

• FTX: A cryptocurrency exchange founded by Sam Bankman-Fried that filed for bankruptcy in November 2022 after being unable to honor customer withdrawal requests.

• Effective Altruism: A philosophical movement focused on using evidence and reason to determine the most effective ways to benefit others.

• Forfeiture: A legal process by which a convicted defendant must surrender assets obtained through or used in criminal activity.

• Community Confinement: The final phase of a federal sentence, which may include placement in a halfway house (Residential Reentry Center) or home confinement before full release.

• First Step Act: A 2018 federal law that expanded good conduct time credits and community confinement eligibility for federal inmates.

See also

• Sam Bankman-Fried
• Wire Fraud
• Securities Fraud
• Money Laundering
• Forbes 30 Under 30 to Prison Pipeline
• Cooperation Mechanisms: Proffers and Substantial Assistance

Frequently Asked Questions

Q: When will Caroline Ellison be released from prison?

Caroline Ellison's projected release date is January 21, 2026. She was transferred from FCI Danbury to community confinement (a halfway house or home confinement) on October 16, 2025. This is approximately 10 months earlier than her original July 2026 projection. The early release reflects good conduct time credits under the First Step Act and her exceptional cooperation with federal prosecutors. After her release, she will serve three years of supervised release.

Q: Where is Caroline Ellison now (December 2025)?

As of December 2025, Caroline Ellison is in community confinement after being transferred from FCI Danbury on October 16, 2025. Community confinement is the final phase of a federal sentence and can include a halfway house (Residential Reentry Center) or home confinement. She is scheduled to be fully released on January 21, 2026. She originally surrendered to federal custody on November 7, 2024.

Q: What did Caroline Ellison do?

Caroline Ellison was CEO of Alameda Research, a cryptocurrency trading firm affiliated with FTX. She pleaded guilty to wire fraud, securities fraud, and money laundering conspiracy for her role in misappropriating billions of dollars in FTX customer funds. Ellison admitted to manipulating financial records and providing false information to lenders and investors at the direction of FTX founder Sam Bankman-Fried. When cryptocurrency markets declined in 2022, she used FTX customer funds to cover Alameda's losses, and when the scheme unraveled, customers lost access to approximately $8 billion in deposits.

Q: How long is Caroline Ellison's prison sentence?

Caroline Ellison was sentenced to two years (24 months) in federal prison on September 24, 2024, despite facing a potential sentence of over 100 years. Her extensive cooperation with federal prosecutors—including providing key testimony that helped convict Sam Bankman-Fried—resulted in a significantly reduced sentence. She was also ordered to forfeit $11 billion and was barred from serving as an officer or director of public companies for 10 years. With good conduct credits and community confinement, she is being released in January 2026—after serving approximately 14 months.

Q: Did Caroline Ellison testify against Sam Bankman-Fried?

Yes, Caroline Ellison was a key government witness in Sam Bankman-Fried's trial. She provided detailed testimony over three days about how FTX customer funds were misappropriated to cover Alameda Research losses, make political donations, purchase real estate, and make venture investments. Judge Kaplan stated that she had "spilled the beans" on Bankman-Fried, and her cooperation was praised as exceptional in both quality and quantity. Her testimony was instrumental in securing Bankman-Fried's conviction on all seven counts.

Q: Were Caroline Ellison and Sam Bankman-Fried in a relationship?

Yes, Caroline Ellison and Sam Bankman-Fried were in an on-and-off romantic relationship from approximately 2018 to 2022 while working together at Alameda Research and FTX. At trial, Ellison testified that the relationship was "complicated" and that Bankman-Fried could be manipulative. Their personal dynamics added complexity to the criminal proceedings.

Q: Why was Caroline Ellison released early?

Caroline Ellison's early release (January 2026 instead of July 2026) is due to several factors: (1) Good conduct time credits under the First Step Act, which allows inmates to earn up to 54 days per year off their sentence; (2) Her exceptional cooperation with federal prosecutors, which Judge Kaplan called "extraordinary"; and (3) Standard BOP policy to transition inmates to community confinement 12 months before release or 10% of their sentence, whichever is greater. She was transferred to community confinement on October 16, 2025.

References

• DOJ Press Release - Caroline Ellison Sentencing
• CNBC - Caroline Ellison Sentenced to 2 Years
• CNBC - Ellison Reports to Prison
• Reuters - Ellison Moved to Community Confinement