FTX co-founder Sam Bankman-Fried, who is accused of misappropriating billions of dollars deposited in the cryptocurrency exchange, walked out of a federal courthouse in New York on Thursday after he posted a $250 million personal recognizance bond.
Bankman-Fried, 30, got into a black SUV and was driven away at the start of a cross-country trip that will eventually end at his parents' home in Palo Alto, California, where he'll be kept under house arrest under terms set by a federal judge.
He appeared in court one day after his extradition from the Bahamas, where he was arrested Dec. 12 following his indictment on a slew of charges related to the collapse of FTX.
Bankman-Fried, wearing a dark blue suit and tan shoes, walked into court with shackles around his ankles. He didn’t speak until the end of the hearing.
A recognizance bond is a written commitment from the accused to appear in court when ordered. In return, Bankman-Fried’s camp won’t be required to meet the full collateral requirements of the bail.
The terms of the package, which by U.S. Attorney Nicolas Roos described as “highly restrictive” and the largest pretrial bond that he could recall, were agreed to by federal prosecutors and Bankman-Fried’s attorneys, CNBC reported.
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 home” in Palo Alto, U.S. attorney’s spokesperson Nicholas Biase said in a statement.
Bankman-Fried’s parents, both Stanford Law professors, were in the courtroom.
U.S. Magistrate Judge Gabriel Gorenstein said Bankman-Fried will require “strict” supervision at his parents’ California home.
He must wear an electronic monitoring bracelet and submit to mental health counseling, and he will be restricted to the Northern District of California, according to the bail terms.
Bankman-Fried will also be barred from opening any new lines of credit as he awaits trial.
He was indicted in the Southern District of New York on eight counts, including defrauding FTX lenders and customers, money laundering and campaign finance offenses. He was also charged last week by the Securities and Exchange Commission with defrauding investors and enriching his privately held crypto hedge fund, Alameda Research.
The alleged fraud against customers began in 2019, the Justice Department has said. Gretchen Lowe, the acting director of the Commodity Futures Trading Commission’s Enforcement Division, has pegged customer losses at more than $8 billion.
U.S. Attorney Damian Williams said Bankman-Fried’s actions with FTX were “one of the biggest financial frauds in American history.”
He told Axios in late November he had $100,000 left in his bank account the last time he checked.
Former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang are cooperating with prosecutors, the U.S. attorney for Southern New York said in a video statement.
Bankman-Fried's next hearing is set for Jan. 3. He is likely to appear remotely from his parents' home.
Gorenstein told him that if he failed to appear or jumped bail, a warrant would be issued for his arrest. He asked Bankman-Fried whether he understood.
“Yes, I do,” he said.