FTX co-founder Sam Bankman-Fried was released on $250 million bond Thursday while he awaits trial on criminal fraud charges in connection with the cryptocurrency exchange’s stunning collapse.
U.S. Magistrate Judge Gabriel Gorenstein ruled during an arraignment hearing in Manhattan federal court following Bankman-Fried’s extradition from the Bahamas.
The judge ruled that Bankman-Fried, who recently claimed only $100,000 was left in the bank, would have to live in his parents’ Palo Alto, California home, which had been held as collateral under the terms of his release.
Bankman-Fried entered the courtroom in handcuffs, looking unshaven and pleading no plea.
He bowed his head and made only a brief statement accepting the bail conditions as the judge reviewed the eight criminal counts in the indictment.
The parents, Stanford law professors Joseph Bankman and Barbara Freed, sat quietly throughout the 40-minute hearing. Bankman-Fried was later seen leaving court with a brown paper bag.
Under the agreement, the 30-year-old ex-billionaire, once touted as a possible future Warren Buffett, will be electronically monitored.
FTX and its sister trading firm Alameda Research went bankrupt last month, dissolving a virtual trading business that was once valued at $32 billion by the market.
Prosecutors accused Bankman-Fried of defrauding investors and misusing funds belonging to FTX and Alameda Research clients.
The plane carrying Bankman-Fried of the Bahamas, where FTX is based, arrived in the United States late Wednesday after he waived his right to challenge the U.S. government’s extradition request.
Gorenstein accepted the prosecutor’s recommendation that Bankman-Fried was at little risk of fleeing because he had not contested extradition and had no previous convictions.
– Dramatic breakdown –
Assistant U.S. Attorney for the Southern District of New York Nicolas Roos described Bankman-Fried’s alleged plan as “epic in scale,” and the government already has evidence from more than a dozen cooperating witnesses. and “very strong” evidence for encrypted text messages.
But given the defendant’s lack of a criminal record and his voluntary consent to be extradited, Ruth recommended bail on “highly restrictive” conditions.
Defense attorney Mark Cohen told Gorenstein that Bankman-Fried came to New York “voluntarily.”
“He wanted to resolve the allegations,” Cohen said. “We think that’s a very compelling factor.”
Federal prosecutors last week charged Bankman-Fried with conspiracy, wire fraud, money laundering and election finance irregularities.
They said he was “planning a massive, years-long fraud to divert billions of dollars of exchange platform client funds for personal gain and to help grow his cryptocurrency empire”.
Five of the eight counts against Bankman-Fried carry a maximum penalty of 20 years in prison.
The SEC has separately charged him with violating securities laws.
Bankman-Fried’s appearance comes after U.S. Attorney Damian Williams announced late on Wednesday that two key figures in the case — Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang — had admitted to being involved in FTX’s collapse. came after the allegations. Cooperate with authorities.
Their charges “relate to their role in the fraud that led to the collapse of FTX,” he said, without giving further details.
Separately, the SEC and the Commodity Futures Trading Commission (CFTC) announced Wednesday that they have filed civil lawsuits against Ellison and Wang.
The CFTC estimates that $8 billion was misappropriated from FTX customer accounts.
Since its inception in 2019, FTX has emerged as a leader in the cryptocurrency space.
Bankman-Fried has appeared on the covers of finance and technology magazines and attracted huge investments from prominent fund managers and venture capitalists.
But that all blew up dramatically in November, when media reports suggested that Alameda’s balance sheet was largely built on FTX-created tokens, with no standalone value — and exposed Bankman-Fried’s firm There are dangerous interconnections.
Bankman-Fried was arrested at his Nassau apartment on December 12 at the request of New York federal prosecutors.
He spent nine days in jail as a permanent resident of the Bahamas, weighing his options before telling Nassau District Court on Wednesday that he would not oppose extradition.
(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)
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