Sam Bankman-Fried to be Released on Record $250M Bond, Placed Under House Arrest – Following his first court appearance in Manhattan federal court on Thursday, FTX founder Sam Bankman-Fried will be released on a $250 million bond and placed under house arrest in his parents’ California home. US District Judge Gabriel Gorenstein approved the agreement requiring the alleged fraudster to voluntarily depart the Bahamas in order to face several charges, including wire fraud, securities fraud, conspiracy, money laundering, and campaign financing violations. Combined, the charges carry a prison term of 115 years.
Before the hearings began, he appeared in court wearing a dark gray suit and sporting a 5 o’clock shadow, and huddled with his attorneys Christian Everdell and Mark Cohen, who represented high-profile sex offender Ghislaine Maxwell earlier this year. Prosecutors decided to return Bankman-Fried into the custody of his parents, Joseph Bankman and Barbara Fried, both law professors at Stanford University.
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Assistant US Attorney Nick Roos stated that the bond, which was to be signed by the defendant, his parents, and a non-family member, was the “highest ever pre-trial bond” the feds had ever offered. The deal was prearranged, sources told The Post and came after Bahamian authorities handed over Bankman-Fried, 30, to US officials Wednesday after the fallen mogul agreed to waive an extradition hearing and face the music in Manhattan. Officials in the Caribbean country had denied Bankman-Fried’s request for bail after the alleged crypto crook was busted at an island resort.
Roos stated that Bankman-Fried was obliged to report to pre-trial services in the Northern District of California by 10 a.m. on Friday as part of the agreement. According to prosecutors, the suspect would be permitted to leave his parents’ home in Palo Alto for exercise and mental health and substance addiction treatment, but would be prohibited from making non-sanctioned transactions over $1,000, with the exception of legal bills.
“For bail, you must consider the weight of the evidence. This was a fraud of epic proportions. If that was the only test, detention would likely be appropriate. But he voluntarily consented to extradition. That should be given weight,” argued Assistant US Attorney Nick Roos. “If he had resisted, we would have opposed release. But his assets have diminished. This is a financial crime and he no longer works for FTX or Alameda. So the risk to the community is a marginal consideration. We propose a restrictive bail package.”
Bankman-Fried is accused of illegally using investors’ money to buy real estate, fund his trading firm Alameda Research and make political donations — a scheme which prosecutors likened to “a house of cards” built “on a foundation of deception.”
“FTX’s value sank from $32 billion to $1 billion after investors made a run on the token when it was revealed that the company used investments in its trademark token FFT to fund Alameda.” Last month, the former multibillionaire claimed he was down to his last $100,000, and his parents “told friends that their son’s legal bills will likely wipe them out financially,” according to the Wall Street Journal.
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His $250 million bond was 25 times greater than the collateral required in 2009 from infamous Ponzi scheme financier Bernie Madoff. While Bankman-Fried was being transported to the United States on a private jet Wednesday evening to face the charges, Manhattan US Attorney Damian Williams said that two of his associates were also accused in connection with the alleged fraud and had secretly pleaded guilty. According to prosecutors, Gary Wang, 29, co-founder of FTX, and Carolyn Ellison, 28, former CEO of Alameda Research and ex-girlfriend of Bankman-Fried, admitted to wire fraud, securities fraud, and commodities fraud.
