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Carolyn Ellison, the former CEO of Alameda Research and a central figure in the FTX scandal, has announced that she is no longer behind bars.
US Bureau of Prisons records show that Ellison has been transferred from federal prison to the Residential Rehabilitation Administration (RRM) in New York. This transition represents the transition from prison to community residence.
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What does RRM status really mean?
According to the Bureau of Prisons inmate locator, Ellison remains in federal custody with an expected release date of February 20, 2026However, his current status confirms that he is no longer a resident of a correctional facility.
Explain the term RRM – an abbreviation forResidential reintegration management– Supervises the final phase of the federal sentence. Individuals subject to RRM may be placed in… Transitional home or home in homeinstead of prison.
Despite the continued supervision of the Bureau of Prisons, inmates face fewer physical limitations and may be allowed to work, maintain limited social contact, and prepare for reintegration.
Unlike prison, RRM agreements include No cells and no guards, with much more independenceAlthough strict monitoring was maintained and movement restrictions were imposed.
Ellison’s transfer indicates that he has entered the reinstatement phase of his sentence, not that he has been released.
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Ellison’s role in the collapse of FTX
Ellison pleaded guilty in 2022 to multiple federal fraud charges related toMisuse of FTX customer funds.
As CEO of Alameda Research, the trading arm closely linked to FTX, he admitted to executing trades and financial maneuvers that relied on billions of customer deposits.
Prosecutors and the court emphasized a clear distinction between Ellison’s role and that of the FTX founder. Sam Bankman-Friedwho designed the systems that enabled the fraud. Ellison did not control FTX’s exchange infrastructure, client asset custody mechanisms, or governance.
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Their cooperation was crucial. Ellison became the government’s key witness, providing extensive testimony that helped convict Bankman-Fried. In 2024, a federal judge convicted himTwo years in prisonindicating his cooperation, the initial admission of guilt and his secondary role.
A clear contrast with Do Kwon
Ellison’s release from prison coincides with a start Do Kwon, co-founder of Terraform Labs, served a 15-year federal prison sentence. Due to fraud related to the collapse of the stablecoin TeraUSD.
Prosecutors argued that Kwon intentionally misled investors about the stability of Terra’s algorithmic peg, causing losses estimated at more than $40 billion.
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Unlike Ellison, he was Be a founderAnd a public promoter and designer of the system at the center of the collapse. The disparity in decisions reflects how courts distinguish between system designers and operators.
Too lenient or legally consistent?
Ellison’s legal transfer to community detention was considered legally routine, but politically charged. Critics see it as reinforcing perceptions of uneven accountability in cryptocurrency scandals.
Prosecutors argue that it reflects applicable sentencing principles: cooperation, diminished authority and acceptance of responsibility.
For now, Ellison remains under federal supervision. However, his release from prison, albeit only temporarily, has raised the familiar question – who really pays the price when cryptocurrency empires collapse?
