Sam Bankman-Fried, the founder of FTX, will be released on a $250 million bond as he awaits trial on fraud charges related to the collapse of the cryptocurrency exchange, according to a federal magistrate judge in New York.
According to federal prosecutors in Manhattan, Sam Bankman-Fried is accused of using billions of dollars in FTX customer funds to cover losses at his hedge fund, Alameda Research. These actions are being considered fraud.
Sam Bankman-Fried was not required to enter a plea during a hearing on Thursday. He has previously admitted to risk-management issues at FTX, but maintains that he does not believe he has committed a crime. Mark Cohen, Bankman-Fried’s defense lawyer, declined to comment following the hearing in a Manhattan federal court.
During the hearing, prosecutor Nicolas Roos informed U.S. Magistrate Judge Gabriel Gorenstein that the bond package for Bankman-Fried would involve surrendering his passport and being confined to his parents’ home in Palo Alto, California. In addition, he would need to undergo regular mental health treatment and evaluation.
According to Roos, the bond package for Bankman-Fried is the “largest ever pretrial bond.”
Sam Bankman-Fried, who is 30 years old, was taken into custody by the FBI last week in the Bahamas, where he lived and where FTX is headquartered. His arrest marked a significant fall from grace for the once-billionaire. Bankman-Fried left the Caribbean nation in FBI custody on Wednesday evening.
Sam Bankman-Fried’s defense lawyer, Mark Cohen, stated that he agreed with the proposed bail conditions set by prosecutors. He also mentioned that Bankman-Fried’s parents, who are both Stanford Law School professors, would co-sign the bond and offer the equity in their home as a guarantee for his return to court.
Cohen stated that Bankman-Fried had not attempted to flee and remained where he was.
During the hearing, Bankman-Fried wore a gray suit and leg restraints and only spoke when asked by Judge Gorenstein if he understood the conditions of his release and the potential consequences of failing to appear in court.
Bankman-Fried replied that he understood.
Judge Gorenstein set the next court date for January 3, 2023, before Judge Ronny Abrams, who will oversee the case.
Gorenstein emphasized the need for strict pretrial supervision, including electronic monitoring and a prohibition on opening new lines of credit or businesses.
Gorenstein also noted that due to Bankman-Fried’s notoriety, it would be impossible for him to hide or engage in further financial schemes without being recognized.
