FTX founder Fred Bankman allowed a $250 million bond deposit, and house arrest

New York (AP) — Crypto entrepreneur Sam Bankman-Fred left a Manhattan court Thursday with his parents after they agreed to sign a $250 million bond and keep him in their California home while he awaits trial on charges that he defrauded investors. Customer deposits on his FTX trading platform.

Assistant US Attorney Nicholas Ross said in federal court that Bankman Fried, 30, “committed fraud of epic proportions.” Ross proposed strict bail terms including a $250 million bond—which he believes is the largest federal pretrial bond ever—and house arrest at his parents’ home in Palo Alto.

An important reason for allowing bail, Ross said, was that Bankman-Fried, who was imprisoned in the Bahamas, had agreed to be extradited to the United States.

Reunited with his parents and attorney inside the courtroom, the apparently silent Bankman-Fried shook the hands of a supporter before walking out the door, where he was rushed by photographers and a video crew until he left in a car.

Magistrate Judge Gabriel W. Gornstein approved the bond and house arrest, though he demanded that an electronic monitoring bracelet be placed on Bankman-Fried before he left the courtroom. Ross had recommended his placement on Friday in California.

Bankman-Fried was shackled at his ankles when he entered the courtroom dressed in a suit and tie to be seated between his lawyers. He did not speak in the session except to respond to the judge. Towards the end, Gornstein asked him if he understood that he would face arrest and owe $250 million if he chose to flee.

Bankman Fried replied, “Yes, I do.”

Shortly thereafter, the hearing ended and Bankman-Fried led his hands into the front pockets of his pants by American marshals. His next trial date has been set for January 3, when he will appear before the judge who will preside over the case.

His bail terms also required that he not open any new lines of credit, start a business, or enter into financial transactions greater than $1,000 without government or court approval.

Ross said the bond was to be secured by equity in his parents’ home and the signature of them and two other financially responsible people with significant assets. Bail was described as a “personal guarantee,” meaning that the surety did not need to meet the bail amount.

Bankman Fried, arrested in the Bahamas Last week, he was flown to New York late Wednesday after he decided not to contest his extradition.

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

Caroline Ellison, 28, former CEO of Bankman Fried’s trading firm Alameda Research, and Gary Wang, 29, co-founder of FTX, have pleaded guilty to charges including wire fraud, securities fraud and commodity fraud.

US Attorney Damien Williams said in a video statement that both are cooperating with investigators and have agreed to assist in any prosecution. He warned others who had enabled the alleged fraud to come forward.

“If you engaged in misconduct at FTX or Alameda, it’s time to move on,” he said. “We move quickly, and our patience is not eternal.”

Prosecutors and regulators contend that Bankman-Fried has been at the center of numerous illegal schemes to use client and investor money for personal gain. He faces the possibility of decades in prison if he is convicted of all the charges against him.

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

Bankman Fried is accused of using the money, illegally taken from FTX clients, to enable deals in Alameda, spending lavishly on real estate and winning millions of dollars in fundraising campaigns for American politicians.

Founded in 2019, FTX has taken the crypto investment phenomenon to great heights, quickly becoming one of the world’s largest exchanges for digital currency. Seeking clients outside of the tech world, it hired actor and comedian Larry David to appear in a TV commercial shown during the Super Bowl, positioning cryptocurrency as the next big thing.

However, Bankman-Fried’s cryptocurrency empire collapsed abruptly In early November when customers withdrew deposits en masse amid reports of questioning some of the financial arrangements.

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