FTX founder Sam Bankman-Fried to be released on $250mn bond

Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, will be released on $250mn bond after returning to the US to face a raft of criminal charges, a federal magistrate judge ruled on Thursday.

Judge Gabriel Gorenstein agreed to release the 30-year-old on what government lawyers said was the “largest ever pre-trial bond”, secured against the home of his parents in California, where he will be confined. Two other individuals who have yet to be named — one of whom cannot be a family member — will also be required to secure the bond.

The former billionaire had “achieved sufficient notoriety” to make it difficult for him to flee the US or commit further crimes, Gorenstein said in a packed hearing that lasted just over half an hour.

Bankman-Fried, who appeared in court in leg cuffs and wearing a dark suit and tie, will also be fitted with a location-tracking bracelet and has already forfeited his passport. He will be restricted to his parents’ home and the district of northern California, and allowed to go outdoors for monitored exercise. He will also be allowed to see a therapist.

Bankman-Fried did not enter a plea to the charges against him during Thursday’s hearing. His parents, who are both professors at Stanford Law School, were in attendance.

“Mr Bankman-Fried perpetrated a fraud of epic proportions,” federal prosecutor Nicolas Roos told the court. He said the government had dozens of witnesses lined up, as well as encrypted text messages and “tens of thousands” of documents that could be entered into evidence.

However, he pointed out Bankman-Fried had “voluntarily consented to extradition” from the Bahamas on Wednesday, and that his assets had “diminished” to the point that he was no longer able to flee easily. Bankman-Fried had previously told journalists he was down to his last $100,000 after FTX collapsed into bankruptcy.

As well as posting a bond and having his movements restricted, Bankman-Fried was barred from making any financial transactions of more than $1,000 without government permission. He said just three words during the hearing — “Yes, I do” — in response to a query from the judge if he understood the conditions of his bail package.

Federal prosecutors charged Bankman-Fried last week with eight counts — including conspiracy to commit wire fraud on customers and lenders, money laundering and violations of campaign finance laws. If convicted, he could spend the rest of his life in prison.

Bankman-Fried’s legal woes worsened on Wednesday night when the US attorney for the Southern District of New York announced — while he was being flown from the Bahamas — that two of his closest colleagues pleaded guilty to fraud charges in relation to FTX’s implosion.

Caroline Ellison, who ran FTX’s trading affiliate Alameda, and Gary Wang, a co-founder of FTX itself whom authorities accuse of writing the underlying code that disadvantaged the exchange’s regular customers, both agreed to co-operate with federal prosecutors on Monday, and waived their right to a written indictment and an assessment of the charges by a grand jury.

An initial conference in Bankman-Fried’s case is scheduled for January 3.