FTX founder Bankman-Fried to be released on $250 million bond

The fallen cryptocurrency entrepreneur Sam Bankman-Fried can post $250 million bond and live in his parents’ home in California while he awaits trial on charges that he swindled investors and looted customer deposits on his FTX trading platform, a judge said Thursday.

Assistant U.S. Attorney Nicolas Roos said in U.S. District Court in Manhattan that Bankman-Fried, 30, “perpetrated a fraud of epic proportions.” Roos proposed strict bail terms, including a $250 million bond and house arrest at Bankman-Fried’s parents’ home in Palo Alto, California. Roos said an important reason for allowing bail was that Bankman-Fried agreed to waive extradition.

Magistrate Judge Gabriel W. Gorenstein agreed to the bond and also approved the house arrest proposal. He also said Bankman-Fried would be required to get an electronic monitoring bracelet before leaving the Manhattan courthouse. He will only be able to leave his parents’ house for court hearing and to exercise, the court decided.

Bankman-Fried wore a suit and tie in court and sat between his attorneys. Two U.S. marshals sat behind him.

His first U.S. court appearance comes after the onetime crypto wunderkind was flown from the Bahamas to the U.S. on Wednesday. Bankman-Fried was arrested earlier this month on charges of wire fraud, conspiracy, money laundering and other financial crimes. Also on Wednesday, the U.S. attorney in Manhattan announced that two of Bankman-Fried’s closest business associates had also been charged and had secretly agreed to plea deals.

Caroline 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 said in a video statement that both were cooperating with investigators and had agreed to assist in any prosecution. He warned others who enabled the alleged fraud to come forward.

“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he said. “We are moving quickly, and our patience is not eternal.”

Possibility of decades in prison

Prosecutors and regulators contend that Bankman-Fried was at the center of several illegal schemes to use customer and investor money for personal gain. He faces the possibility of decades in prison if convicted on all counts.

In a series of interviews before his arrest, Bankman-Fried said he made mistakes running FTX and Alameda but that he never intended to defraud anyone.

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, founded in 2019, rode the crypto investing phenomenon to great heights quickly, becoming one of the world’s largest exchanges for digital currency. Seeking customers beyond the tech world, it hired the comic actor and writer Larry David to appear in a TV ad that ran during the Super Bowl, hyping 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.