Where was he imprisoned? Arkham Asylum or Blackgate Penitentiary?
I believe he is freed from Blackgate Penitentiary. Mainly due to him being apprehended by Batman in The Dark Knight and then not showing up again until after Bane opens Blackgate.
Batman Wiki entry on Jonathan Crane:
When Bane frees the prisoners from Blackgate Penitentiary, Scarecrow is one of the thousands of prisoners freed.
At the end of Batman Begins, the statement is made that the Narrows, Arkham Asylum's location, was "lost", which would mean that sociopathic criminals that would have been taken to Arkham would instead be housed elsewhere, namely, Blackgate.