Former FTX CEO Sam Bankman-Fried released on $250 million bond after appearing in a US court
Sam Bankman-Fried, the disgraced founder of crypto exchange FTX, appeared in a US courtroom in New York on Thursday to face eight counts of fraud and conspiracy. A judge has released him on $250 million bail in his first appearance on American soil since his arrest in the Bahamas last week.
The judge approved a bail package proposed by federal prosecutors and attorneys for Bankman-Fried that also requires the former so-called crypto king to have an electronic surveillance bracelet and be under house arrest at his parents’ home in Palo Alto, California. He has already handed in his passport.
The judge said Bankman-Fried will face charges that he later stole billions of dollars from customers of his crypto trading platform.
Bankman-Fried was escorted into the courtroom by a US Marshal wearing a navy blue suit jacket and white button-down shirt. The clink of the shackles around his ankles could be heard as he walked to his place at the defense table.
His parents, law professors at Stanford University, sat in the third row behind him.
Bankman-Fried was speaking once during the hearing when Magistrate Judge Gabriel Gorenstein asked him if he understood the consequences he would face if he went out on bail and said, “Yes, I do.”
Other bail conditions include mental health treatment, disposal of firearms, and bans on opening new lines of credit, businesses, or transactions over $1,000 without government approval.
The judge said Bankman-Fried had “sufficient notoriety” to prevent anyone from doing business with him.
“Mr. Bankman-Fried committed fraud of epic proportions,” prosecutor Nicholas Roos said.
Roos said evidence against Bankman-Fried included multiple cooperating witnesses, testimony from other company employees and encrypted messages.
On Wednesday, two senior executives linked to collapsed crypto exchange FTX pleaded guilty to multiple criminal charges and are cooperating with federal prosecutors, according to unsealed court filings. In addition, the couple faces civil fraud charges from the Securities and Exchange Commission, which were announced Wednesday night.
Gary Wang, the co-founder of FTX, and Caroline Ellison, who served as CEO of hedge fund Alameda Research, pleaded guilty to multiple counts of conspiracy and fraud for their role in the scam scheme that led to the collapse of the crypto trading platform.
Bankman-Fried was extradited to the United States on Wednesday night, confirmed Bahamas Attorney General Senator Ryan Pinder. The Bahamas foreign minister has signed an extradition order to the United States, the Bahamas State Department confirmed in a statement.
Prosecutors allege that Bankman-Fried was involved in several fraudulent schemes. Among them, they allege Bankman-Fried stole money from FTX clients to support Alameda, made investments in other companies, bought luxury real estate, and donated tens of millions of dollars to political campaigns.
If convicted on all eight counts of fraud and conspiracy, he faces life imprisonment.
FTX and its sister trading house Alameda both filed for bankruptcy last month after investors withdrew their deposits from the exchange, sparking a liquidity crisis.
In the weeks since its bankruptcy, FTX’s new CEO, John Ray III, has publicly stated that client funds deposited on the FTX website have been mixed up with funds at Alameda, which was making a series of speculative, high-risk bets. Ray described the situation at the two companies as “old-fashioned embezzlement” by a small group of “grossly inexperienced and undemanding individuals”.