Caroline Ellison Moved to New York Reentry Center Ahead of Release

This is the first change in her custody status since she began serving a two-year sentence for her role in the FTX collapse. The move comes in the middle of the broader legal fallout from FTX, including a $10 million proposed settlement in a class-action lawsuit against Silvergate Bank that is seeking claims from FTX- and Alameda-linked clients. While several criminal cases tied to the exchange concluded, civil litigation and related proceedings stemming from the FTX debacle are still ongoing.

Caroline Ellison Shifted to NYC Reentry Center

Caroline Ellison, the former CEO of Alameda Research, has been transferred out of the Federal Correctional Institution (FCI) in Danbury, Connecticut, where she was serving part of her two-year prison sentence related to the collapse of cryptocurrency exchange FTX. According to Federal Bureau of Prisons records that were updated Wednesday, Ellison is now housed under a Residential Reentry Management field office in New York City. This is the first known change in her custody status since she reported to FCI Danbury in November of 2024.

Prison officials reportedly transferred Ellison on Oct. 16, though no public explanation was provided for the move. Bureau of Prisons data also indicates that Ellison is scheduled for release on Feb. 20, roughly nine months earlier than the full term of her sentence. The reason for her early release has not been revealed.

Caroline Ellison release information (Source: Federal Bureau of Prisons)

Ellison received a two-year sentence after pleading guilty to multiple charges tied to her role in FTX’s downfall, a much lighter sentence than the one that was handed to FTX founder and former CEO Sam “SBF” Bankman-Fried. Bankman-Fried who was sentenced to 25 years in prison after being convicted on fraud-related charges. Ellison, along with two other former FTX executives, cooperated with prosecutors and testified against Bankman-Fried during his October 2023 trial.

Live court reporting from Inner City Press during SBFs sentencing

The collapse of FTX in November of 2022 triggered one of the largest criminal cases in the history of the cryptocurrency industry. Ellison, Bankman-Fried, and several others were indicted on charges including fraud and money laundering after it emerged that billions of dollars in customer funds were misused. During her testimony, Ellison directly implicated Bankman-Fried by stating that he designed and approved systems that allowed Alameda Research to borrow as much as $14 billion from FTX customer accounts.

Unlike Bankman-Fried, who stayed in the public eye after his arrest, Ellison avoided public attention until her court appearances. Her safety became a concern after allegations surfaced that Bankman-Fried leaked excerpts from her private diary to the media, which led to the revocation of his bail in August 2023. Ellison’s whereabouts remained undisclosed until she took the stand at trial.

Ellison met Bankman-Fried while both were working at Jane Street in 2016. She joined Alameda Research in 2017 at his invitation and rose through the ranks, eventually becoming sole CEO in August 2022. In the wake of FTX’s collapse, she became one of the most scrutinized figures in crypto history.

Silvergate Case Opens Claims for FTX Clients

In other FTX-related news, one of the class-action lawsuits filed against Silvergate Bank is seeking claims from individuals and entities that deposited fiat funds into accounts linked to FTX or Alameda Research between 2019 and 2022. The case was filed in the US District Court for the Southern District of California, and it centers on allegations that Silvergate and related parties facilitated misconduct tied to the now-defunct cryptocurrency exchange and its trading arm.

Under the proposed settlement, eligible claimants have until Jan. 30 to opt out or submit claims as part of a $10 million agreement intended to resolve accusations that Silvergate Bank, its parent company Silvergate Capital Corporation, and former CEO Alan J. Lane aided and abetted tortious conduct by FTX, Alameda Research, and former FTX chief Sam Bankman-Fried. In a court filing dated Dec. 8, plaintiffs described the settlement as fair and reasonable, and argued that it represents a meaningful recovery from the bankrupt bank and offers relief beyond what victims may receive through the FTX bankruptcy process.

US District Judge Ruth Bermudez Montenegro scheduled a final hearing on Feb. 9 to determine whether the settlement will receive court approval. If approved, the $10 million fund will be distributed among potentially tens of thousands of claimants, as court records indicate that more than 46,000 parties have already been contacted through the FTX bankruptcy proceedings.

Silvergate Bank FTX settlement options for clients (Source: FTXbanksettlement.com)

Silvergate was among a small number of US banks willing to serve cryptocurrency firms and maintained ties to FTX before the exchange’s collapse in November of 2022. After the fallout, Silvergate voluntarily shut down its operations in March 2023 due to mounting legal and financial pressure.

While many of the criminal cases stemming from the FTX collapse have been resolved, legal proceedings connected to the scandal continue. Bankman-Fried, Caroline Ellison, and former FTX Digital Markets co-CEO Ryan Salame are currently serving federal prison sentences, while former executives Nishad Singh and Gary Wang received time served. Michelle Bond, Salame’s wife, is facing campaign finance charges in New York related to alleged misuse of FTX funds.