FTX founder Sam Bankman-Fried to be released on $250 million bail, will live with his parents

Technology

FTX founder Sam Bankman-Fried was released on $250 million bond while awaiting trial for fraud and other criminal charges, a New York federal judge ruled Thursday.

Bankman-Fried stepped out of U.S. District Court in Manhattan, flanked by his parents, his legal team, and court security at 2:19 local time.

The terms of his personal recognizance bond were agreed to by prosecutors and Bankman-Fried’s lawyers. The 30-year-old will face his next hearing, presided over by Judge Ronnie Abrams, in New York City on Jan. 3., where he’ll enter his plea and be arraigned.

A recognizance bond is a written commitment from the accused to appear in court when ordered. In return, Bankman-Fried’s camp would not be required to meet the full collateral requirements on the bail.

The bond was secured by equity in his family home, and by the signatures of his parents and two other individuals with “considerable” assets.

FTX co-founder Sam Bankman-Fried is escorted out of the Magistrate’s Court on December 21, 2022 in Nassau, Bahamas. 
Joe Raedle | Getty Images

In addition to the $250 million package, which prosecutors called “the largest-ever pretrial bond,” the former crypto billionaire would also be required to wear an electronic monitoring bracelet, submit to mental health counseling and restrict himself travel within and between the Northern District of California and the Southern & Eastern Districts of New York.

Judge Gabriel Gorenstein said Bankman-Fried would require “strict” supervision following his release to his parents’ home in California.

His parents, both Stanford Law professors, were present in the courtroom. Bankman-Fried was flanked by two U.S. marshals, dressed in a blue suit and brown shoes. Bankman-Fried entered in ankle shackles as well, but traded them for his ankle monitor while in the courtroom.

He only spoke when the judge asked him if Bankman-Fried understood the consequences of breaking his bail agreement.

“Yes, I do,” he told the judge.

The former FTX CEO is also be barred from opening any new lines of credit of more than $1,000 while awaiting trial over what federal regulators have called a “brazen” fraud at his bankrupt crypto empire.

Bankman-Fried was the heart of “a fraud of epic proportions,” Assistant U.S. Attorney Nicolas Roos told the court. But he voluntarily returned to the United States, has no history of flight and has significantly reduced financial assets, Roos said.

Bankman-Fried had previously claimed that he was down to a mere $100,000, a steep fall from grace for a man who was once at the head of a $32 billion crypto empire.

Bankman-Fried stands accused of perpetrating a multibillion-dollar fraud on his investors, using customer funds to purchase properties, fund political donations and backstop trades at his hedge fund Alameda Research.

Federal regulators allege over $8 billion in customer funds is missing. FTX filed for bankruptcy protection in Delaware on Nov. 11. Bankman-Fried’s successor, CEO John Ray, said he’d never seen such a “complete failure of corporate control.”

Two of his top lieutenants, Caroline Ellison and Gary Wang, pleaded guilty to related fraud charges and are cooperating with law enforcement. Wang’s and Ellison’s plea deals were revealed Wednesday.

Bankman-Fried was charged by the U.S. Attorney for the Southern District with eight counts including securities fraud and money laundering, and was rendered from the Bahamas to New York om Wednesday evening.

Bankman-Fried’s bail dwarfs other federal white-collar bonds. Bernie Madoff posted a $10 million bond while awaiting trial on his multibillion-dollar Ponzi scheme. Jeff Skilling, former Enron CEO, posted a $5 million bond, while Elizabeth Holmes, Theranos founder, posted a scant $500,000.

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