US judge orders release of FTX boss Bankman-Fried on $250 million bail
FTX co-founder Sam Bankman-Fried, who is accused of misappropriating billions of dollars deposited in the crypto currency exchange, walked out of federal courthouse in New York on Thursday after posting $250 million personal recognizance bond.
Bankman-Fried got into a black SUV and was driven away at the start of a cross-country trip that'll eventually end at his parents' home in Palo Alto, California, where he'll be kept under house arrest, under terms set by a federal judge.
The 30-year-old appeared in court one day following his extradition from the Bahamas, where he was arrested on Dec. 12 following his indictment on a slew of charges related to the collapse of FTX.
Bankman-Fried, wearing a dark blue suit and tan shoes, walked into court with shackles around his ankles. He did not speak until the end of the hearing.
A recognizance bond is a written commitment from the accused to appear in court when ordered. In return, Bankman-Fried’s camp will not be required to meet the full collateral requirements on the bail.
The terms of package, described by U.S. Attorney Nicolas Roos as “highly restrictive” and the largest pretrial bond that he could recall, were agreed to by federal prosecutors and Bankman-Fried’s attorneys, CNBC reported.
The “$250 million personal recognizance bond signed by Mr. Bankman-Fried and co-signed by his parents ... will be secured by the parents’ equity interest in their home” in Palo Alto, California, U.S. Attorney’s Office spokesperson Nicholas Biase said in a statement after the court appearance.
Bankman-Fried’s parents, both Stanford Law professors, were in the courtroom.
Judge Gabriel Gorenstein said Bankman-Fried will require “strict” supervision following his release to his parents’ California home.
He must wear an electronic monitoring bracelet, submit to mental health counseling and will be restricted to the Northern District of California, according to the bail terms.
Bankman-Fried will also be barred from opening any new lines of credit while awaiting trial.
He was indicted in the Southern District of New York on eight counts, including defrauding FTX lenders and customers, money laundering and campaign finance offenses. He was also charged last week by the U.S. Securities and Exchange Commission with defrauding investors and enriching his privately held crypto hedge fund Alameda Research.
The alleged fraud against customers began in 2019, the Justice Department has said. Gretchen Lowe, the acting director of the Commodity Futures Trading Commission’s Enforcement Division, has pegged customer losses at more than $8 billion.
U.S. Attorney Damian Williams called Bankman-Fried’s actions with FTX “one of the biggest financial frauds in American history.”
Bankman-Fried was hailed as a crypto genius with FTX once reportedly valued at a whopping $32 billion, until the exchange collapsed in November.
He told Axios in late November he had $100,000 left in his bank account the last time he checked.
Thursday's development came one day after a federal prosecutor in New York announced two of Bankman-Fried’s top business partners — an FTX co-founder and the former CEO of the hedge fund Alameda Research — 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 set for Jan. 3. He'll likely appear remotely from his parents' home.
Gorenstein told him if he failed to appear or committed bail jumping, there would be a warrant issued for his arrest. The judge asked Bankman-Fried if he understood.
“Yes, I do,” he said.
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