Sam Bankman-Fried, former FTX founder and billionaire was released on $250 million bail on Thursday as he awaits trial on criminal fraud charges over a collapse of his crypto exchange. US judge Gabriel Gorenstein announced the ruling during Bankman-Fried’s arraignment hearing in federal court in Manhattan following his extradition from the Bahamas.
Bankman-Fried recently claimed to have only $100,000 left in the bank. He will have to live at his parents’ house in Palo Alto, California, which has been put up as collateral under the terms of release, the judge said. He did not enter a plea.
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The parents, Joseph Bankman and Barbara Fried, both are professors at Stanford Law School. Bankman-Fried was seen leaving the court carrying a brown paper bag. Watch the video here:
The 30-year-old former billionaire will be subjected to an electronic hearing.
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Cryptocurrency exchange FTX and a hedge fund company Alameda Research went bankrupt last month, dissolving a virtual trading business that at one point had been valued by the market at $32 billion.
Prosecutors accused him of cheating investors and misusing funds that belonged to FTX and Alameda Research customers. Five of the eight charges against Bankman-Fried carry a maximum sentence of 20 years in prison each. The US Securities and Exchange Commission (SEC) has separately accused him of violating securities laws.
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Bankman-Fried’s appearance came after US attorney Damian Williams announced late Wednesday that two key figures in the case – Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang – had pleaded guilty to charges related to the FTX collapse and that they were cooperating with authorities for the investigation.
The Commodity Futures Trading Commission (CFTC) estimates $8 billion in funds were misappropriated from FTX customer accounts.
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After its launch in 2019, FTX surged significantly to become a leading player in the crypto world. But it all exploded dramatically in November when a media report revealed Alameda’s balance sheet was heavily built on a token created by FTX with no independent value. It also exposed Bankman-Fried’s companies as being dangerously interlinked. SBF was arrested at his Nassau apartment in the Bahamas on December 12 at the request of the federal prosecutors in New York.