Sam Bankman-Fried, a disgraced cryptocurrency tycoon, has been released on a bond package of $250m (PS208m), while he awaits fraud charges. This is the largest pretrial bond in history.
His parents signed the bond and agreed to place him under house arrest in their home in Palo Alto (California) while he awaits his trial.
Federal prosecutors in Manhattan accused him of taking billions of dollars from customers to pay off losses at Alameda Research, his hedge fund.
Within a matter of months, Bankman-Fried’s star-studded cryptocurrency empire fell. He was accused of defrauding investors from the US.
FTX, once the largest digital currency exchange in the world, was valued at $32bn. However, FTX filed for bankruptcy protection within three days.
Bankman-Fried was responsible for a dramatic implosion which – just a month later saw him taken into custody in The Bahamas.
On Thursday, he was not asked to plead guilty. Although he admitted to previous risk-management errors at FTX, he said he doesn’t believe he is guilty.
After the hearing at Manhattan Federal Court, Mark Cohen, Cohen’s defense lawyer, declined to comment.
His arrest in The Bahamas where he was living and where FTX is based cemented the once-billionaire’s dramatic fall from grace.
Cohen stated that he agrees with the proposed bail conditions.
He mentioned that his parents, both Stanford Law School Professors, would co-sign the bond as well as post the equity in their home to ensure Bankman-Fried’s safe return to court.
Cohen stated that Cohen was able to confirm Cohen’s statement: “My client stayed where he is, he didn’t try to flee.”
After being reunited with his parents, lawyers, and supporters inside the court, Bankman-Fried was seen shaking hands with a supporter and heading out the door. Photographers and video crews chased him until he got into a car.
Bankman-Fried, wearing a grey suit with leg restraints and a grey suit, sat beside his lawyers. He nodded when the judge told him that he would issue a warrant for his arrest if he failed to appear in court.
Gorenstein asked him if he understood his release conditions and he replied that he could be charged for an additional crime if the defendant fails to appear in court.
“Yes I do,” Bankman-Fried replied.
His next court date is set for 3 January 2023. Bankman-Fried is also subject to electronic monitoring, a ban on the opening of new credit lines or businesses, and a ban from opening them.
He stated that Bankman-Fried had “achieved enough notoriety that it wouldn’t be possible” for him hide or to engage in additional financial schemes.
His ‘last $100,000’
In November, concerns about the co-mingling funds between FTX (Bankman-Fried’s hedge-fund) first surfaced. This led to a flurry in customer withdrawals.
The former “crypto-king”, as many media have called him, stated that he was down to $100,000 on 11 November.
Damian Williams, the top federal prosecutionsor, was appointed just hours after Bankman Fried’s plane took off from The Bahamas.
Manhattan announced that two of Bankman Fried’s close associates, former Alameda CEO Caroline Ellison (and FTX cofounder Gary Wang) had pleaded guilty to the charges and were cooperating with prosecutors.