New York: Sam Bankman Freud was released on a $250 million bond on Thursday while awaiting trial over the collapse of the FTX cryptocurrency exchange, which a US prosecutor described as “a fraud of epic proportions”. gave
Federal prosecutors Manhattan has accused the founder of FTX of stealing billions of dollars in customer funds to cover losses at his hedge fund, Alameda Research.
Bankman Freud was not asked to enter A. please on Thursday. He has previously admitted to risk management failures at FTX but has said he does not believe he has criminal responsibility. His defense attorney, Mark Cohen, declined to comment after the hearing in Manhattan federal court.
U.S. Magistrate Judge Gabriel Gorenstein set Bankman Freud’s next court date for January. 3, 2023, before U.S. District Judge Ronnie Abrams, who will handle the case.
Bankman-Fried founded FTX in 2019. A boom in the values of bitcoin and other digital assets pushed the exchange to nearly $32 billion earlier this year, making the Massachusetts Institute of Technology (MIT) billionaire several times over. Also an influential donor to American political campaigns.
Releasing him before trial, Gorenstein said Bankmann Freud had “acquired sufficient notoriety to make it impossible for him to engage in further financial schemes or to hide without detection”.
After Thursday’s court appearance, the one-time billionaire was surrounded by photographers as he exited a lower Manhattan courthouse and got into a black SUV. He sported a facial stubble and a gray suit—a cry too much for the shorts and T-shirt he became notorious for wearing in public appearances while driving FTX.
A prosecutor, Nicholas Rose, told Gorenstein that the bail package would require Bankman-Fried to surrender his passport and remain under house arrest at his parents’ home in Palo Alto, California. He will also need to undergo regular mental health treatment and evaluation.
Roos said that while Bankman-Fried committed “fraud of epic proportions”, he had no flight history and his financial assets were significantly reduced.
Bankman-Fried, 30, was arrested last week in the Bahamas, where he lived and where FTX is based, cementing his fall from grace. He left the Caribbean nation in FBI custody on Wednesday night.
Cohen said he agreed with prosecutors’ proposed bail conditions. He noted that Bankman-Fried’s parents — both professors at Stanford Law School — would co-sign the bond and post the equity in their home as an assurance of her return to court. Both appeared at the hearing.
“My client stayed where he was, he didn’t try to run away,” Cohen said.
The purpose of the bond is to ensure that if Bankman-Fried escapes, the government can seize the family’s assets — including their Palo Alto home — up to $250 million. Reuters could not determine the family’s net worth.
Bankman-Freud said at a New York Times conference in November. 30, after the close of the exchange, that he had $100,000 in his bank account.
‘enough infamy’
With his legs restrained, Bankman Fried sat with his lawyers and nodded as the judge told him that a warrant would be issued for his arrest if he failed to appear in court. Conditions include electronic monitoring by a device before leaving court and a ban on opening new lines of credit or business, Gorenstein said.
He spoke only when Gorenstein was asked if he understood the terms of his release, and that he could be charged with an additional felony if he fails to appear in court.
“Yes I do,” replied Bankman Freud.
But concerns about the matching of funds between FTX and Alameda caused a flurry of customer withdrawals in early November, ultimately forcing the exchange to declare bankruptcy on November 11.
Evidence at trial will consist of testimony from “several cooperating witnesses,” as well as thousands of pages of written communications, Roos said.
Hours after Bankman Freud’s plane took off from the Bahamas, Damian Williams, the top federal prosecutor in Manhattan, announced that two of Bankman Freud’s closest associates – former Alameda CEO Carolyn Ellison and co-founder of FTX Gary Wang pleaded guilty and was cooperating with prosecutors.
According to court papers filed Thursday, the details of their collaboration were kept secret until Bankman-Fried left the Bahamas.