Sam Bankman-Fried, the FTX cryptocurrency fraudster, walked out of a Manhattan courtroom with his parents on Thursday after they agreed to sign a $250 million bond and keep him at their California home while he awaits trial on charges that he swindled investors and looted customer deposits on his FTX trading platform.
In federal court, Assistant U.S. Attorney Nicolas Roos stated that Bankman-Fried, 30, “perpetrated a fraud of epic proportions.” Roos proposed strict bail conditions, including a $250 million bond — the largest federal pretrial bond ever, according to Roos — and house arrest at his parents’ home in Palo Alto.
According to Roos, one of the main reasons for allowing bail was that Bankman-Fried, who had been imprisoned in the Bahamas, agreed to be extradited to the United States.
Inside the courthouse, reunited with his parents and lawyers, an apparently silent Bankman-Fried shook the hand of a supporter before walking out the door, where photographers and video crews rushed him until he left in a car.
Magistrate Judge Gabriel W. Gorenstein agreed to the bond and house arrest, but he insisted on Bankman-Fried wearing an electronic monitoring bracelet before leaving the courthouse. Roos had suggested that it be attached on Friday in California.
Bankman-Fried entered the courtroom in a suit and tie, shackled at the ankles, to take a seat between his attorneys. He only spoke once during the hearing, to respond to the judge. Near the end, Gorenstein asked him if he understood that if he chose to flee, he would face arrest and a $250 million fine.
“I do,” Bankman-Fried replied.
Soon after, the hearing ended, and Bankman-Fried was led out by two U.S. marshals, his hands in his front pants pockets. His next court appearance is scheduled for Jan. 3 before the judge who will preside over the case.
His bail conditions also include a prohibition on opening new lines of credit, starting a business, or engaging in financial transactions worth more than $1,000 without the approval of the government or the court.
The bond was to be secured by the equity in his parents’ home as well as the signatures of his parents and two other financially responsible people with significant assets, according to Roos. The bail was described as a “personal recognizance bond,” which meant that the collateral did not have to cover the full amount of the bail.
FTX founder granted $250 million bond and placed under house arrest
After his parents signed a $250 million personal recognizance bond, FTX founder Sam Bankman-Fried was released from federal court in Manhattan. While awaiting trial, he will reside at his parents’ home in California. (Dec. 22) (AP video by David R. Martin, Ted Shaffrey, Patrick Orsagos)
Bankman-Fried, who was arrested last week in the Bahamas, was flown to New York late Wednesday after deciding not to contest his extradition.
While he was in the air, the Manhattan U.S. Attorney’s Office announced that two of Bankman-closest Fried’s business associates had also been charged and had secretly pleaded guilty on Monday.
Carolyn Ellison, the former CEO of Bankman-trading Fried’s firm, Alameda Research, and Gary Wang, the co-founder of FTX, both pleaded guilty to wire fraud, securities fraud, and commodities fraud.
In a video statement, U.S. Attorney Damian Williams stated that both were cooperating with investigators and had agreed to assist in any prosecution. He warned those who assisted the alleged fraud in coming forward.
“Now is the time to get ahead of it if you participated in misconduct at FTX or Alameda,” he said. “We’re moving quickly, and our patience won’t last forever.”
Prosecutors and regulators allege that Bankman-Fried was at the center of several illegal schemes involving the use of customer and investor funds for personal gain. If convicted on all counts, he could face decades in prison.
Bankman-Fried stated in a series of interviews prior to his arrest that he never intended to defraud anyone.
Bankman-Fried is accused of illegally obtaining funds from FTX customers in order to facilitate trades at Alameda, spend lavishly on real estate, and make millions of dollars in campaign contributions to US politicians.
FTX, which was founded in 2019, rode the crypto investing phenomenon to great heights, quickly becoming one of the world’s largest digital currency exchanges. Seeking customers outside of the tech world, it hired comedian and writer Larry David to appear in a Super Bowl commercial promoting cryptocurrency as the next big thing.
Bankman-crypto Fried’s empire, on the other hand, abruptly collapsed in early November when customers withdrew deposits in large numbers amid reports that some of its financial arrangements were questionable.
The Associated Press