FTX co-founder Sam Bankman-Fried will be released on $250 million, judge rules

FTX co-founder Sam Bankman-Fried, who is accused of misappropriating billions of dollars invested in the cryptocurrency exchange, will be released on a $250 million personal recognizance bond, a New York federal judge ruled Thursday.

The 30-year-old appeared in court a day after he was extradited from the Bahamas, where he was arrested on December 12 following his indictment on a number 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-Fried̵[ads1]7;s camp will not be required to meet all security requirements for the bail.

The package, described by U.S. Attorney Nicolas Roos as “very restrictive” and the largest pretrial bond he could recall, was part of a deal designed by federal prosecutors and Bankman-Fried’s defense 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 in their home” in Palo Alto, Calif., said Nicholas Biase, a spokesman for the U.S. attorney’s office. in a statement after the court hearing.

Bankman-Fried’s parents, both Stanford Law professors, were in the courtroom.

FTX co-founder Sam Bankman-Fried will be released on 0 million, judge rules
Sam Bankman-Fried, center, is escorted and arrives at the Magistrate Court building for a hearing in Nassau, Bahamas, on December 21, 2022.Rebecca Blackwell/AP

Judge Gabriel Gorenstein said Bankman-Fried will require “strict” supervision after he is released to his parents’ home in California.

He must wear an electronic monitoring bracelet, submit to mental health counseling and will be confined to the Northern District of California, according to bail conditions.

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 defrauding FTX borrowers and customers, money laundering and campaign finance offenses. He was also charged last week by the US 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 Department of Justice has said. Gretchen Lowe, 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 largest 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 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 — an FTX co-founder and former CEO of 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 January 3, 2023.

Gorenstein told him that if he failed to appear or commit bail jumping, a warrant would be issued for his arrest. The judge asked Bankman-Fried if he understood.

“Yes, I do,” he said.

Emily Berk contributed.

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