Carolyn Allison is no longer in custody: how federal oversight replaced prison

Former Alameda Research CEO Caroline Ellison has left the federal correctional facility. Instead of standard incarceration, she has been transferred under the supervision of the New York Resocialization Service. According to the U.S. Bureau of Prisons registry, she remains convicted but is no longer physically behind bars. The full release date is set for February 20, 2026.

What has changed in the conditions of serving the sentence

The transfer to the resocialization supervision service followed the completion of part of her sentence. Caroline Ellison was in prison after pleading guilty in 2022 to several federal fraud charges. The court sentenced her to two years in 2024.

The new conditions differ from standard prison life. There are no more cells or constant guards, but strict restrictions are in place. The convicted individual is sent to a temporary residence center or transferred to house arrest. No social freedoms — only regular checks, strict movement rules, and monitoring. Working is permitted, but contacts with the outside world remain limited. This stage prepares a person for reintegration into normal life.

Role in the FTX collapse and cooperation with authorities

Caroline Ellison led the trading division of the crypto exchange, which used billions of dollars of client deposits. These funds were used in risky operations and financial maneuvers. This became a central point of the criminal case against the entire FTX system.

However, Ellison’s role differed from that of the platform’s founder, Sam Bankman-Fried. Bankman-Fried built the exchange’s architecture, managed infrastructure, and made strategic decisions. Ellison participated in execution but not in designing the theft system.

A decisive factor in the sentencing was active cooperation with prosecutors. Caroline Ellison provided detailed testimony that helped secure Bankman-Fried’s conviction. The court took this into account, reducing her sentence. Two years instead of a longer term — this was the result of this strategy.

Contrast with Do Kwon and questions of justice

Meanwhile, Caroline Ellison began serving a lenient regime, while Do Kwon, the founder of Terraform Labs, started serving a 15-year federal sentence. He was convicted of fraud related to the collapse of the TerraUSD stablecoin and investor losses of $40 billion.

The difference in sentences is explained by the roles played. Do Kwon was the architect and public face of the system. Courts impose harsher punishments on project leaders. Caroline Ellison held a subordinate position and actively assisted the investigation.

Society perceives this situation ambiguously. Some see it as an example of uneven distribution of responsibility. Others note that the federal justice system considers each participant’s actual role and willingness to cooperate.

Status remains unchanged

Caroline Ellison remains under federal supervision. The conviction stands, and restrictions are fully in effect. The leniency in the regime is not a release or pardon. It is a transition to a new stage of sentence execution, during which the convicted prepares to reintegrate into society. Federal jurisdiction continues to apply, and supervision will be maintained until February 2026.