Sam Bankman-Fried will be released on a $250 million bond package while he awaits trial on fraud charges related to the collapse of the FTX crypto exchange, a federal magistrate judge said on Thursday.
Prosecutors have accused him of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research.
Nicolas Roos, a prosecutor, told U.S. Magistrate Judge Gabriel Gorenstein that the bail package would require Bankman-Fried to surrender his passport and remain in home confinement at his parents' home in Palo Alto, California. He would also be required to undergo regular mental health treatment and evaluation.
Roos called the package the "largest ever pretrial bond."
Bankman-Fried's defense lawyer Mark Cohen said he agreed with these conditions. He noted that his parents - both Stanford Law School professors - would co-sign the bond and post the equity in their home as assurance for Bankman-Fried's return to court.
"My client remained where he was, he made no effort to flee," Cohen said.
Wearing a gray suit and leg restraints, Bankman-Fried sat flanked by his lawyers and nodded when the judge informed him that if he fails to appear in court, a warrant would be issued for his arrest.
Gorenstein set Bankman-Fried's next court date for Jan. 3, 2023.
Bankman-Fried, arrested in the Bahamas last week, was flown to New York late Wednesday after deciding not to challenge his extradition.
While he was in the air, the U.S. attorney in Manhattan announced that two of Bankman-Fried’s closest business associates had also been charged and had secretly pleaded guilty.
Carolyn Ellison, 28, the former chief executive of Bankman-Fried's trading firm, Alameda Research, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.
U.S. Attorney Damian Williams said in a video statement that both were cooperating with investigators and had agreed to assist in any prosecution. He warned others who enabled the alleged fraud to come forward.
“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he said. “We are moving quickly, and our patience is not eternal.”
Prosecutors and regulators contend that Bankman-Fried, 30, was at the center of several illegal schemes to use customer and investor money for personal gain. He faces the possibility of decades in prison if convicted on all counts.
In a series of interviews before his arrest, Bankman-Fried said he never intended to defraud anyone.
Bankman-Fried is charged with using money, illicitly taken from FTX customers, to enable trades at Alameda, spend lavishly on real estate, and make millions of dollars in campaign contributions to U.S. politicians.
FTX, founded in 2019, rode the crypto investing phenomenon to great heights quickly, becoming one of the world's largest exchanges for digital currency. Seeking customers beyond the tech world, it hired the comic actor and writer Larry David to appear in a TV ad that ran during the Super Bowl, hyping crypto as the next big thing.
Bankman-Fried's crypto empire, however, abruptly collapsed in early November when customers pulled deposits en masse amid reports questioning some of its financial arrangements.
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