Former FTX CEO Sam Bankman-Fried released on $250 million bond after appearing in a US court #news

New York
CNN
 — 

Sam Bankman-Fried, the disgraced founder of crypto exchange FTX, appeared in a US courtroom in New York Thursday to face eight counts of fraud and conspiracy. A judge released him on a $250 million bond in his first appearance on American soil since his arrest last week in the Bahamas.

The judge agreed to a bail package proposed by federal prosecutors and lawyers for Bankman-Fried that also requires the former so-called crypto king to have an electronic monitoring bracelet and be under house arrest at his parents’ home in Palo Alto, California. He has already surrendered his passport.

The judge said Bankman-Fried would be arraigned on the charges that he stole billions of dollars from customers of his crypto-trading platform at a future date.

Bankman-Fried was escorted into the courtroom by a US Marshal, wearing a navy suit jacket and white button-down shirt. The sound of clanking from the shackles around his ankles could be heard as he walked to his seat at the defense table.

His parents, law professors at Stanford University, were seated in the third row behind him.

Bankman-Fried spoke once during the hearing when Magistrate Judge Gabriel Gorenstein asked him if he understood the consequences he would face if he skipped out on bail, saying, “Yes, I do.”

Other bail conditions include mental health treatment, surrender of any firearms, and prohibitions against opening any new lines of credit, businesses, or engaging in transactions over $1,000 without the government approval.

The judge said Bankman-Fried has “sufficient notoriety” to stop anyone from engaging with him on business deals.

“Mr. Bankman-Fried perpetrated a fraud of epic proportions,” said Prosecutor Nicholas Roos.

Roos said evidence against Bankman-Fried includes multiple cooperating witnesses, the testimony of other employees of the companies and encrypted messages.

On Wednesday, two senior executives associated with collapsed crypto exchange FTX have pleaded guilty to multiple criminal charges and are cooperating with federal prosecutors, according to unsealed court records. Additionally, the pair face civil fraud charges from the Securities and Exchange Commission that were announced Wednesday night.

Gary Wang, the co-founder of FTX, and Caroline Ellison, who served as CEO of the hedge fund Alameda Research, pleaded guilty to multiple counts of conspiracy and fraud for their roles in the fraud scheme that led to the collapse of the crypto-trading platform.

Bankman-Fried was extradited to the United States Wednesday night, Bahamas Attorney General Sen. Ryan Pinder confirmed. The Foreign Minister of the Bahamas signed a warrant of surrender allowing his extradition to the United States, the Ministry of Foreign Affairs in the Bahamas confirmed in a statement.

Prosecutors allege Bankman-Fried engaged in multiple fraudulent schemes. Among them, they allege that Bankman-Fried stole money from FTX customers to support Alameda, made investments in other companies, bought luxury real estate and donated tens of millions of dollars to political campaigns.

If convicted on all eight charges of fraud and conspiracy, he could face life in prison.

FTX and its sister trading house, Alameda, both filed for bankruptcy last month after investors rushed to pull their deposits from the exchange, sparking a liquidity crisis.

In the weeks since their bankruptcy, FTX’s new CEO, John Ray III, has stated publicly that customer funds deposited on the FTX site were commingled with funds at Alameda, which made a number of speculative, high-risk bets. Ray described the situation at the two companies as “old-fashioned embezzlement” at the hands of a small group of “grossly inexperienced and unsophisticated individuals.”