Former FTX chief Sam Bankman-Fried will face home detention
while awaiting trial in the United States on charges that he defrauded
customers and investors of the crashed cryptocurrency exchange. The former
billionaire was released to his parents, Barbara Fried and Joseph Bankman, on a $250 million bail. He will also have to surrender his passport. Bankman-Fried’s defense counsel said he agreed with these
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After the hearing, Bankman-Fried did not plead or deny
guilty. Two of his top colleagues, Caroline Ellison and Gary Wang, pleaded
guilty to fraud on Wednesday and are helping with the investigation.
The 30-year-old appeared in a US courtroom for an initial
appearance on Thursday after being extradited from the Bahamas to face fraud
charges. A prosecutor said Bankman-Fried had carried out a “fraud of epic
proportions” and the government was proposing a highly-restrictive bail
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Last week, the former FTX founder was arrested in the
Bahamas, where he lived and where FTX is based, cementing the one-time
billionaire’s fall from grace. He left the Caribbean country in FBI custody on
Bankman-Fried stands accused of perpetrating a
multibillion-dollar fraud on his investors, using customer funds to buy
properties, fund political donations and backstop trades at his hedge fund
Alameda Research. Federal regulators allege more than $8 billion in customer
funds is missing. FTX filed for bankruptcy in Delaware on November 11.
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Bankman-Fried has admitted risk-management failures at FTX
but has said he does not believe he has criminal liability. At a hearing in the
Bahamas on Wednesday, his lawyer, Jerone Roberts, read an affidavit in which
Bankman-Fried said he had agreed to extradition in part out of a “desire to
make the relevant customers whole,” reported Reuters.
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FTX’s collapse reverberated across an already-struggling cryptocurrency
industry, prompting calls for further regulation as well as accountability for
those who led the exchange.