On Thursday, a Manhattan judge agreed to release the founder of the failed cryptocurrency platform FTX, Sam Bankman-Fried, on $250 million bond. He will now await trial at his parent’s home in California instead of a New York jail cell.
On Thursday afternoon, Bankman-Fried walked out of the US District courthouse in Manhattan surrounded by his parents, his lawyers, and US Marshals. The bond was the highest in federal court history, and was reportedly secured through his parents pledging the equity in their home, as well as two unnamed wealthy individuals.
Bankman-Fied stands accused of defrauding cryptocurrency investors out of nearly $2 billion in the course of perpetrating, “one of the biggest financial frauds in American history.”
On Wednesday night he was extradited from the Bahamas, and by Thursday he was standing before a Manhattan judge in his first US court appearance. He will face eight felony charges, among them wire fraud, securities fraud, money laundering, and campaign finance violations. Altogether he faces as much as 115 years in prison.
Assistant US Attorney Nick Roos noted that although Bankman-Fried committed fraud on a scale of “epic proportions,” he had consented to extradition, and lost most of his assets, so his release pending trial was a “marginal consideration.”
Bankman-Fried’s bond was 25 times larger than the bond for fraudster Bernie Madoff, the perpetrator of what is widely regarded as the most infamous Ponzi scheme in American history. The only other defendant to be given a $250 million bond was “junk bond king” Michael Milken, who would ultimately plead guilty to manipulating stocks and other charges in 1990.
Banksman-Fried was required to surrender his passport and agree to home confinement at his parent’s house in California. Both his parents are law professors at Stanford University. He will also be required to a undergo mental health evaluation and mental health treatment. He will be allowed to leave home confinement for exercise as well as mental health and substance abuse treatment.
He will return to New York on January 3, to enter his plea to the charges in a pretrial hearing.
Reportedly two of his business associates, Caroline Ellison and Gary Wang, have already pled guilty to criminal charges and are cooperating witnesses in the investigation into the collapse of the failed cryptocurrency exchange.
