Sam Bankman-Fried, the co-founder of FTX who is accused of misappropriating billions of dollars invested in the cryptocurrency exchange, left a New York federal courthouse on Thursday after posting a $250 million personal recognizance bail.
The 30-year-old ex-FTX CEO boarded a black SUV and was taken away to begin a cross-country journey that will conclude at his parents' home in Palo Alto, California, where he will be placed under house arrest by a federal judge.
Sam Bankman-Fried Gets Out on Bail
He appeared in court the day after his extradition from the Bahamas, where he was detained on December 12 after being indicted on a variety of counts relating to the demise of FTX. Sam Bankman-Fried, attired in a navy suit and tan shoes, entered the court with his ankles restrained. He did not speak until the hearing's conclusion, NBC News reported.
A recognizance bond is the defendant's written promise to appear in court when required. In exchange, Sam Bankman-Fried's camp will not be forced to fulfill the bail's full collateral conditions. Federal prosecutors and Bankman-Fried's counsel agreed to the conditions of the package, which US Attorney Nicolas Roos called "very stringent" and the biggest pretrial bail he could recall, according to CNBC.
The "$250 million personal recognizance bond signed by Mr. Bankman-Fried and co-signed by his parents... will be secured by the parents' equity interest in their Palo Alto property," according to a statement from the US attorney's office. The parents of Bankman-Fried, both Stanford Law professors, were present in the courtroom. Gabriel Gorenstein, a US magistrate judge, stated that Sam Bankman-Fried will require "tight" surveillance at his parents' California residence.
According to the bail conditions, he must wear an electronic monitoring device, undergo mental health therapy, and remain inside the Northern District of California. While awaiting trial, Sam Bankman-Fried will also be prohibited from opening any new credit lines.
Ex-FTX CEO's Wealth
In the Southern District of New York, he was charged with eight charges, including deceiving FTX lenders and clients, money laundering, and campaign financing violations.
Last Monday, the Securities and Exchange Commission also accused him of cheating investors and profiting from his crypto hedge fund, Alameda Research. Bankman-Fried was formerly considered the Crypto King. He even attempted to assist the government in regulating the business as he promised clients and investors high profits.
That was until crypto giant Binance expressed concerns over FTX's financial stability and falling crypto prices sparked a bank run, revealing FTX and its sister company Alameda Research were suspiciously working together to pay off debts, leaving an $8 billion hole in its accounts, as reported by The New York Times.
Tom Brady and Shaquille "Shaq" O'Neal were among the celebrities that endorsed FTX. The company attracted large investors like SoftBank and BlackRock. Nevertheless, the company's low-risk, high-reward business strategy almost seemed too wonderful to be true. Indeed, that was so.
According to Reuters, between $1 billion and $2 billion in customer funds are unaccounted for following the collapse of FTX. Since then, SBF has been arrested and charged with many counts of fraud; according to authorities, he engineered "one of the worst financial scams in US history." He faces a maximum of 115 years in jail.
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