Sam Bankman-Fried released on record $250M bond, placed under house arrest
Shaggy-haired FTX founder Sam Bankman-Fried shuffled out of Manhattan federal court — clutching a bag from a New York bagel store — Thursday after being released on a record $250 million bond as part of a deal that’ll have him await his fraud trial at his parents’ in California.
Assistant US Attorney Nick Roos offered up the personal recognizance bond — possibly the “highest ever pre-trial bond” proposed by the feds — and house arrest in Palo Alto during Bankman-Fried’s first court appearance in the US.
The accused fraudster — who faces a slew of criminal charges tied to the sudden implosion of his billion-dollar empire and cryptocurrency exchange — “voluntarily consented to extradition” from the Bahamas, where he was arrested last week, which Roos cited as an important reason for allowing bail.
“If he had resisted, we would have opposed release. But his assets have diminished. This is a financial crime and he no longer works for FTX or [his trading firm] Alameda. So risk to the community is a marginal consideration,” Roos said.
A disheveled-looking Bankman-Fried was fitted for an electronic monitoring bracelet before leaving court with his parents — both of them Stanford University professors — and lawyer, holding a brown paper bag from New York City Bagel & Coffee House.
He ignored a swarm of reporters and cameras on Pearl Street and hopped into a waiting vehicle, which was set to take him to JFK Airport, accompanied by a retired NYPD detective for his flight out West, according to sources.
Magistrate Judge Gabriel Gorenstein signed off on the bond and house arrest proposal for Bankman-Fried, but required that Bankman-Fried get his ankle bracelet fitted before leaving court, as opposed to in California, as Roos had proposed. The massive bond amount agreed to was 25 times larger than the collateral officials demanded from Ponzi schemer Bernie Madoff in 2009.
Bankman-Fried faces charges of wire fraud, securities fraud, conspiracy, money laundering and campaign finance violations that combined could land him behind bars for 115 years if convicted.
The alleged crypo con appeared expressionless in court, cutting a slim figure in a navy blue suit and sporting a 5 o’clock shadow with his trademark wild hair styled in a relatively tame fashion.
Prosecutors said Bankman-Fried had committed crimes of “epic proportions.”
The case against him involves “multiple cooperating witnesses,” dozens of FTX employees, and tens of thousands of pages of company documents, Roos noted.
Defense attorney Mark Cohen, meanwhile, successfully argued that Bankman-Fried was not a flight risk.
“My client voluntarily consented to come to face these charges here in New York,” he told the judge. “He wants to address them.”
“It would be very difficult for this defendant to hide without being recognized,” Gorenstein said in agreement. “So I believe that the risk of flight is appropriately mitigated.”
Bankman-Fried was busted at an island resort last week and held in a notorious jail there after his request for bail was denied. His bond agreement the judge signed off on Thursday was prearranged, sources told The Post, and was the pretext for the fallen mogul’s decision to waive an extradition hearing in the Bahamas and agreed to face the music in the US.
Before the proceedings got underway, the accused crypto con huddled with his lawyers Christian Everdell and Cohen — who represented high-profile sex offender Ghislaine Maxwell earlier this year.
Federal prosecutors had a “location monitoring specialist” at their table, and agreed to release Bankman-Fried into the custody of his parents, Stanford University law professors Joseph Bankman and Barbara Fried.
The bond would be partially secured by Bankman-Fried’s parents’ interest in their $4 million home next to the elite school, and that equity would have to be paid within three weeks, Gorenstein said.
The two were in the courtroom in support of their son, who hugged his father after the hearing ended. As counts were being read, Bankman-Fried’s dad sat still as he clutched the shaking hand of his wife.
Bankman-Fried was not accompanied by federal officials on the cross-country trek home.
“Once a bond is signed and conditions are met, defendants are no longer in the custody of the US Marshal Service,” US District Court spokesman Joseph Pecorino told The Post.
Under the deal, Bankman-Fried was required to turn himself in to pretrial services in the Northern District of California by 10 a.m. Friday, ahead of a Jan. 3 pre-trial hearing, Roos said.
He will be able to leave his parents’ house for exercise and mental health and substance abuse treatment, but would be forbidden to make non-sanctioned transactions above $1,000, with the exception of legal fees, according to prosecutors.
He is also required to surrender his travel documents and agree not to conduct any new credit or business dealings.
Bankman-Fried is accused of illegally using investors’ money to buy real estate, fund his trading firm Alameda Research and make political donations — a scheme which prosecutors likened to “a house of cards” built “on a foundation of deception.”
FTX’s value sunk from $32 billion to $1 billion after investors made a run on the token when it was revealed the company used investments in its trademark token FFT to fund Alameda last month.
The former multi-billionaire claimed he was down to his last $100,000, and his parents “told friends that their son’s legal bills will likely wipe them out financially,” according to The Wall Street Journal.
While Bankman-Fried was being flown to the States to face the charges on a private jet Wednesday night Manhattan US Attorney Damian Williams announced that two of his cohorts had also been charged in connection with the alleged grift and secretly pleaded guilty.
Gary Wang, 29, an FTX co-founder, and Carolyn Ellison, 28, the former CEO of Alameda Research and Bankman-Fried’s ex-girlfriend, copped to wire fraud, securities fraud and commodities fraud, according to prosecutors.
In a New York Times interview on Dec. 1, Bankman-Fried said he “made a lot of mistakes” but “did not ever try to commit fraud on anyone” and was “shocked” by the company’s sudden collapse.
