FTX founder Sam Bankman-Fried leaves court on Thursday
(Picture: AP)Sam Bankman-Fried was released on $250 million bail on Thursday while he awaits trial on fraud charges following the collapse of cryptocurrency exchange FTX.
Federal prosecutors in Manhattan have accused the 30-year-old entrepeneur of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research.
He was not asked to enter a plea as he appeared at Manhattan federal court.
He has previously acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability. His defence lawyer, Mark Cohen, declined to comment after the hearing.
After Bankman-Fried co-founded FTX in 2019 aged just 27, a boom in the values of bitcoin and other digital assets propelled the exchange to a valuation of some $32 billion earlier this year, making the Massachusetts Institute of Technology (MIT) graduate a billionaire several times over, as well as an influential donor to US political campaigns.
But concerns about commingling of funds between FTX and Alameda led to a flurry of customer withdrawals in early November, ultimately forcing the exchange to declare bankruptcy on November 11.
Bankman-Fried later said at a New York Times conference that he had just $100,000 in his bank account.
The one-time billionaire was surrounded by photographers on Thursday as he exited the lower Manhattan courthouse following the hearing and entered a black SUV.
He sported facial stubble and a grey suit - a far cry for the shorts and t-shirt he became notorious for wearing in public appearances while running FTX.
Nicolas Roos, a prosecutor, told US Magistrate Judge Gabriel Gorenstein that the bail package would require Bankman-Fried to surrender his passport and remain in home confinement at his parents’ home in Palo Alto, California.
He would also be required to undergo regular mental health treatment and evaluation.
Mr Roos said the package was “highly restrictive.” He said that while Bankman-Fried had carried out a “fraud of epic proportions,” he had no history of flight and his financial assets had reduced significantly.
Bankman-Fried was arrested last week in the Bahamas, where he lived and where FTX is based, cementing his fall from grace. He departed the Caribbean nation in FBI custody on Wednesday night, before landing back in the US.
Mr Cohen said he agreed with prosecutors’ proposed bail conditions. He noted that Bankman-Fried‘s parents - both Stanford Law School professors - would co-sign the bond and post the equity in their home as assurance for his return to court. Both appeared in court.
“My client remained where he was, he made no effort to flee,” Mr Cohen said.
Wearing leg restraints, Bankman-Fried sat flanked by his lawyers and nodded when the judge informed him that if he fails to appear in court, a warrant would be issued for his arrest.
He spoke only when asked by Mr Gorenstein whether he understood the conditions of his release, and that he could be charged with an additional crime if he fails to show up to court.
“Yes I do,” Bankman-Fried replied.
Mr Gorenstein set Bankman-Fried‘s next court date for January 3, before US District Judge Ronny Abrams, who will handle the case.
“I’m going to require strict pretrial supervision,” Mr Gorenstein said, with conditions including electronic monitoring via a device to be fitted before the defendant left court, and a ban on opening new lines of credit or businesses.
He said Bankman-Fried had “achieved sufficient notoriety that it would be impossible” for him to hide without being recognized or engage in further financial schemes.
Mr Roos said that evidence at trial would consist of testimony from “multiple cooperating witnesses,” as well as thousands of pages of written communications.
Just hours after Bankman-Fried‘s plane from the Bahamas took off, Damian Williams, the top federal prosecutor in Manhattan, announced that two of Bankman-Fried‘s closest associates - former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang - had pleaded guilty and were cooperating with prosecutors.
