FTX founder Sam Bankman-Fried cleared $250 million bond and house arrest

Cryptocurrency entrepreneur Sam Bankman-Fried can post $250 million (almost Rs. 2,070 crore) bond and live in his parents’ home in California while awaiting trial for defrauding investors and looting customer deposits on its FTX trading platform, a judge ruled Thursday.

Assistant U.S. Attorney Nicolas Roos said in U.S. District Court in Manhattan that Bankman-Fried, 30, “committed fraud of epic proportions.” Roos offered strict bail conditions, including $250 million bail and house arrest at his parents’ home in Palo Alto, California.

A significant reason for allowing bail was that Bankman-Fried had agreed to waive extradition, Roos said.

Magistrate Judge Gabriel W Gorenstein accepted bail and also approved the proposed house arrest. He also said Bankman-Fried would be required to obtain an electronic monitoring bracelet before leaving the Manhattan courthouse.

Bankman-Fried wore a suit and tie to court and sat between his lawyers. Two US marshals sat behind him.

Bankman-Fried, arrested in the Bahamas last week, was flown to New York on Wednesday evening after deciding not to contest his extradition.

While in the air, the US Attorney in Manhattan announced that two of Bankman-Fried’s closest associates had also been charged and had secretly pleaded guilty.

Carolyn Ellison, 28, former chief executive of Bankman-Fried trading firm Alameda Research, and Gary Wang, 29, co-founder of FTX, pleaded guilty to charges of wire fraud, securities fraud and commodity fraud.

US Attorney Damian Williams said in a video statement that the two were cooperating with investigators and agreed to participate in any prosecution. He warned others who allowed the alleged fraud to come to light.

“If you participated in a foul at FTX or Alameda, now is the time to get ahead,” he said. “We are moving fast and our patience is not eternal.”

Prosecutors and regulators allege that Bankman-Fried was at the center of several illegal schemes to use clients’ and investors’ money for personal gain. He faces decades in prison if convicted on all counts.

In a series of interviews before his arrest, Bankman-Fried said he never intended to defraud anyone.

Bankman-Fried is accused of using money, illegally taken from FTX clients, to enable transactions at Alameda, spend lavishly on real estate and make millions of dollars in campaign contributions to US politicians.

FTX, founded in 2019, quickly took the crypto investing phenomenon to great heights, becoming one of the world’s largest digital currency exchanges. Seeking clients beyond the tech world, he hired actor and comedic writer Larry David to appear in a TV commercial that aired during the Super Bowl, making crypto the next big thing.

Bankman-Fried’s crypto empire, however, came crashing down in early November when clients withdrew deposits en masse amid reports questioning some of its financial arrangements.