FTX boss Bankman-Fried to be freed on bail over fraud charges
A US judge ordered FTX co-founder Sam Bankman-Fried be released on $250 million bail Thursday while he awaits trial on criminal fraud charges over the spectacular collapse of his crypto exchange.
New York judge Gabriel Gorenstein made the ruling during Bankman-Fried's arraignment hearing in federal court in Manhattan following his extradition from the Bahamas.
Bankman-Fried, who recently claimed to have only $100,000 left in the bank, will have to live at his parents' home in Palo Alto, California, the judge ruled.
Under the deal, the 30-year-old ex-billionaire, once touted as a possible future Warren Buffett, will be subjected to electronic monitoring.
FTX and its sister trading house Alameda Research went bankrupt last month, dissolving a virtual trading business that at one point had been valued by the market at $32 billion.
Prosecutors allege Bankman-Fried cheated investors and misused funds that belonged to FTX and Alameda Research customers.
The plane carrying Bankman-Fried from the Bahamas, where FTX is headquartered, arrived in the United States late Wednesday after he waived his right to challenge the US government's extradition request.
Gorenstein determined that Bankman-Fried posed minimal risk of flight because he did not challenge extradition and has no prior convictions.
Equity on his parents' home is to be included as part of the bond package.
Federal prosecutors last week charged Bankman-Fried with conspiracy, wire fraud, money laundering and election finance violations.
He "was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform's customer funds for his own personal benefit and to help grow his crypto empire," they said.
Five of the eight counts against Bankman-Fried carry a maximum sentence of 20 years in prison each.
The US Securities and Exchange Commission has separately accused him of violating securities laws.
Bankman-Fried's appearance came after US attorney Damian Williams announced late Wednesday that two key figures in the case -- Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang -- had pleaded guilty to charges related to the FTX collapse and that they were cooperating with authorities.
Their charges were "in connection with their roles in the frauds that contributed to FTX's collapse," he said, without providing further details.
- Dramatic collapse -
Separately, the SEC and the Commodity Futures Trading Commission (CFTC) announced Wednesday they had filed civil suits against Ellison and Wang and that the two were cooperating, which should lead to lighter punishments.
The CFTC estimates that $8 billion in funds were misappropriated from FTX customer accounts.
After its founding in 2019, FTX rose spectacularly to become a leading player in the crypto world.
Bankman-Fried appeared on the covers of finance and tech magazines, with Fortune likening him to Buffett, and drew in huge investments from prominent fund managers and venture capitalists.
But it all imploded dramatically in November when a media report said Alameda's balance sheet was heavily built on a token created by FTX with no independent value -- and exposed Bankman-Fried's companies as being dangerously interlinked.
Bankman-Fried was arrested at his Nassau apartment on December 12 at the request of the federal prosecutors in New York.
A Bahamas permanent resident, he spent nine days in prison, weighing his choices before telling the Nassau magistrate court Wednesday that he would not fight extradition.
H.Erikson--MP
