Disgraced “crypto king” Sam Bankman-Fried has been released on $250 million bail – the largest in pretrial history | Science and technology news
Disgraced cryptocurrency tycoon Sam Bankman-Fried has been released on a $250 million (£208 million) bond package while awaiting fraud allegations, the largest pre-trial bond issue in history.
The bail was signed by his parents, who agreed to keep him under house arrest at their home in Palo Alto, California while he awaits trial.
Federal prosecutors in Manhattan accuse him of stealing billions of dollars in client funds to offset losses at his hedge fund Alameda Research.
Within a month Bankman-Fried’s The star-studded £21 billion cryptocurrency empire collapsed and he was accused of defrauding investors in the US.
FTX was once one of the world’s largest digital currency exchanges, valued at $32 billion, but filed for bankruptcy protection within three days.
Bankman-Fried oversaw a spectacular implosion which – almost exactly a month later – saw him arrested in the Bahamas.
He was not called on Thursday to enter a plea. He has previously acknowledged flaws in risk management at FTX but said he doesn’t believe he is criminally responsible.
Defense attorney Mark Cohen declined to comment after the hearing in federal court in Manhattan.
His arrest in the Bahamas, where he lived and where FTX is based, cemented the one-time billionaire’s spectacular fall from grace.
Cohen said he agreed to the bail terms proposed by prosecutors.
He noted that his parents — both Stanford Law School professors — would co-sign the bond and put the equity into theirs
as an assurance of Bankman-Fried’s return to court.
“My client stayed where he was, he made no move to flee,” Cohen said.
Reunited with his parents and lawyers in court, a seemingly silent Bankman-Fried shook hands with a supporter before walking out the door, where photographers and video crews rushed him until he drove away in a car.
“Impossible to Hide”
Bankman-Fried, wearing a gray suit and leg cuffs, sat flanked by his lawyers and nodded as the judge told him a warrant would be issued for his arrest if he failed to appear in court.
He spoke only when asked by Gorenstein if he understood the terms of his release and that if he did not appear in court he could be charged with another crime.
“Yes, I do,” Bankman-Fried replied.
His next court date is scheduled for January 3, 2023. Bankman Fried is also threatened with electronic surveillance and a ban on opening new lines of credit or business.
He said Bankman-Fried had “gained sufficient notoriety that it would be impossible for him” to go into hiding without being recognized or engage in further financial schemes.
Except for his “last $100,000”
Concerns about the commingling of funds between FTX and Bankman-Fried’s hedge fund first surfaced in November, prompting a spate of client withdrawals.
On Nov. 11, the former “crypto king,” as many media outlets dubbed him, said he was down to his last $100,000.
Just hours after Bankman-Fried’s plane took off from the Bahamas, Damian Williams, the chief federal attorney, arrived
Manhattan, announced that two of Bankman-Fried’s closest associates – Caroline Ellison, former CEO of Alameda, and Gary Wang, co-founder of FTX – had pleaded guilty and were cooperating with prosecutors.