FTX Co-Founder Sam Bankman-Fried Freed on $250 Million Bail

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FTX co-founder Sam Bankman-Fried, accused of misappropriating billions of dollars deposited on the cryptocurrency exchange, walked out of New York federal court on Thursday after posting a $250 million personal acknowledgment bond. .

Bankman-Fried got into a black SUV and was taken on the start of a cross-country trip that will end at his parents’ home in Palo Alto, Calif., where he will be held under house arrest under terms set by a federal judge.

The 30-year-old appeared in court the day after his extradition from the Bahamas, where he was arrested on Dec. 12 after being indicted on a series of charges related to the FTX collapse.

Bankman-Fried, wearing a dark blue suit and brown shoes, entered the courtroom with handcuffs around his ankles. He did not speak until the end of the hearing.

A bond of acknowledgment is a written undertaking by the accused to appear in court when ordered. In return, Bankman-Fried’s camp will not be required to meet any collateral requirements on bail.

The terms of the package, described by US Attorney Nicolas Roos as “highly restrictive” and the largest pretrial bond he can remember, were agreed upon by federal prosecutors and Bankman-Fried’s attorneys, CNBC reported.

The “$250 million personal acknowledgment bond signed by Mr. Bankman-Fried and co-signed by his parents … will be secured by the parent’s equity interest in his home” in Palo Alto, Calif., the spokesperson for the US Attorney Nicholas Biase in a statement after the court appearance.

Bankman-Fried’s parents, both Stanford law professors, were in court.

Sam Bankman-Fried, center, is escorted to the Magistrate Court building for a hearing
Sam Bankman-Fried, center, arrives at the Magistrate Court building for a hearing in Nassau, Bahamas, December 21, 2022.Rebecca Blackwell / AP

Judge Gabriel Gorenstein said Bankman-Fried will require “strict” supervision upon her release from her parents’ California home.

He must wear an electronic monitoring wristband, undergo mental health counseling and will be restricted to the Northern District of California, per bail terms.

Bankman-Fried will also be barred from opening new lines of credit pending trial.

He was indicted in the Southern District of New York on eight counts, including fraud against FTX creditors and customers, money laundering and campaign finance misdemeanors. He was also accused last week by the US Securities and Exchange Commission of defrauding investors and enriching his cryptocurrency hedge fund Alameda Research.

The alleged fraud against customers began in 2019, the Justice Department said. Gretchen Lowe, acting director of the Commodity Futures Trading Commission’s Enforcement Division, estimated client losses at more than $8 billion.

US Attorney Damian Williams called Bankman-Fried’s actions with FTX “one of the greatest financial frauds in American history”.

Bankman-Fried was hailed as a crypto genius with the FTX once reportedly valued at $32 billion until the stock market collapsed in November.

He told Axios in late November that he had $100,000 left in his bank account the last time he checked.

Thursday’s development came a day after a federal prosecutor in New York announced that two of Bankman-Fried’s top business partners – a co-founder of FTX and former CEO of hedge fund Alameda Research – had pleaded guilty to fraud. .

Former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang are cooperating with prosecutors, the U.S. Attorney for Southern New York said in a video statement.

Bankman-Fried’s next hearing is scheduled for January 3. He will likely appear remotely from his parent’s house.

Gorenstein told him that if he failed to show up or committed a bail jump, a warrant would be issued for his arrest. The judge asked Bankman-Fried if he understood.

“Yes, I know,” he said.

Emily Berk and David K. Li contributed🇧🇷

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