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Caroline Ellison, of FTX fame, was released early from federal custody this week, serving just 14 months of what was supposed to be a two-year sentence for her role in what has become one of the largest financial crimes in history.<\/p>\n
The Federal Bureau of Prisons confirmed that Ellison was released from community confinement, which can include either home confinement or a halfway house, on Wednesday. Ellison had previously been transferred from a federal prison in Connecticut to community confinement in October, Business Insider reported in December.<\/p>\n
For those who need a refresher, Ellison was\u00a0sentenced<\/span>\u00a0in September 2024 after pleading guilty to conspiring with FTX founder and her ex-boyfriend Sam Bankman-Fried on multiple counts of fraud. Prosecutors said she played a role in a scheme that ultimately helped bring down FTX, once one of the world\u2019s largest cryptocurrency exchanges.<\/p>\n At the time, Ellison was CEO of Alameda Research, a crypto hedge fund co-founded by Bankman-Fried. While overseeing the firm, Ellison conspired with Bankman-Fried and other executives to misuse billions of dollars in customer funds deposited on FTX. Those funds were secretly transferred over to Alameda to cover trading losses, finance venture investments, issue personal loans, and even bankroll political contributions.<\/p>\n Between 2019 and 2022, Ellison knowingly misled lenders, investors, and customers by overstating Alameda\u2019s financial health, even preparing misleading spreadsheets to throw people off the scent. In total, the fraud involved billions of dollars in misappropriated customer funds.<\/p>\n Everything came crashing down in the fall of 2022, when concerned customers tried to withdraw their money from FTX, exposing that the exchange did not have enough money on hand to cover deposits. The company filed for bankruptcy shortly after.<\/p>\n Ellison later became the star witness in the case against Bankman-Fried. He was sentenced to 25 years in prison by U.S. District Judge Lewis Kaplan in March 2024.<\/p>\n \u201cA man willing to flip a coin as to the continued existence of life on earth,\u201d Kaplan said at the time. \u201cMr. Bankman-Fried knew that Alameda was spending customer funds on risky investments, political contributions and Bahamas real estate. The funds were not his to use.\u201d<\/p>\n Kaplan was notably more lenient when sentencing Ellison, citing her extensive cooperation with prosecutors and apparent remorse.<\/p>\n \u201cI\u2019ve seen a lot of cooperators in 30 years. I\u2019ve never seen one quite like Ms. Ellison,\u201d Kaplan said, according to Bloomberg. He even described her as \u201cvulnerable\u201d and \u201cexploited.\u201d<\/p>\n Still, Kaplan said he could not give her a \u201cget-out-of-jail-free card.\u201d<\/p>\n Ellison\u2019s lawyers did not immediately respond to a request for comment from Gizmodo.<\/p>\n<\/p><\/div>\n