FTX founder Bankman-Fried allowed $250M bond, house arrest

FTX founder Bankman-Fried allowed $250M bond, house arrest

NEW YORK Cryptocurrency entrepreneur Sam Bankman Fried walked out from a Manhattan courthouse with his parents. They had agreed to sign a $250million bond and keep him at home while he awaits trial for allegedly defrauding investors and taking customer deposits from his FTX trading platform.

Assistant U.S. attorney Nicolas Roos stated in federal court that Bankman -Fried, 30, “perpetrated a fraudulent scheme of epic proportions.” Roos proposed strict bail terms, including the $250million bond — which he claimed is the largest federal pretrial bond — and house arrest at his parents’ home in Palo Alto. Roos stated that Bankman-Fried, who was in jail in the Bahamas, had agreed to be extradited.

An apparently silent Bankman Fried was reunited with his parents and lawyers inside of the courthouse before he walked out the door. Photographers and video crews chased him until he got into a car.

Magistrate Judge Gabriel W. Gorenstein agreed to the bond and house arrest, though he required that an electronic monitoring bracelet be affixed to Bankman-Fried before he left the courthouse. Roos had suggested that it be attached Friday in California.

Bankman-Fried was shackled at the ankles when he entered the courtroom in a suit and tie to take a seat between his attorneys. The hearing was brief and he only spoke to the judge. Gorenstein asked him near the end if he understood that he would be arrested and owe $250 millions if he fled.

“Yes.

Soon afterward, the hearing was over and Bankman-Fried was led out by two U.S. Marshals, his hands in his front pockets. His Jan. 3 court date was set. He will appear before the judge who will be preside over the case.

His bail conditions require that he does not open new credit lines, start a business, or make financial transactions exceeding $1 ,000 without approval from the government or court.

The bond was to be secured with the equity in his parents’ house and the signatures of two financially responsible individuals with substantial assets, Roos stated. The bail was described by Roos as a “personal recognition bond”, meaning that the collateral did not have to be sufficient to cover the bail amount.

Bankman-Fried, arrested in the Bahamas last week, was flown to New York late Wednesday after deciding not to challenge his extradition. While he was on the ground, the U.S. Attorney in Manhattan announced that two of Bankman Fried’s closest business associates were also being charged and had secretly pleaded guilty Monday.

Carolyn Ellison, 28, the former chief executive of Bankman-Fried’s trading firm, Alameda Research, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

U.S. Attorney Damian Williams stated in a video that the two had agreed to cooperate with investigators. He warned those who were involved in the fraud to come forward.

” If you were involved in misconduct at FTX, Alameda or FTX, now is the time for you to move quickly. Our patience is not eternal.” he stated. “We are moving quickly, and our patience is not eternal.”

Prosecutors and regulators contend that Bankman-Fried was at the center of several illegal schemes to use customer and investor money for personal gain. If convicted of all charges, he could spend decades in prison.

Bankman-Fried stated that he did not intend to defraud anyone in a series interview before his arrest.

Bankman-Fried is charged with using money, illicitly taken from FTX customers, to enable trades at Alameda, spend lavishly on real estate and make millions of dollars in campaign contributions to U.S. politicians.

FTX was founded in 2019, and quickly became one of the largest digital currency exchanges in the world. It hired Larry David, a comic actor and writer, to promote crypto as the next big thing.

Bankman-Fried’s crypto empire, however, abruptly collapsed in early November when customers pulled deposits en masse amid reports questioning some of its financial arrangements.

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