Sam Bankman-Fried, the man accused of defrauding cryptocurrency investors out of nearly $2 billion, will be awaiting trial at his parents’ house in California, rather than in a New York jail cell, after a Manhattan judge agreed to release the FTX founder on a $250 million bond.
The shaggy-haired Bankman-Fried, who ranked as the second-largest donor to Democratic Party political campaigns in 2022, walked out of the US District Courthouse in Manhattan on Thursday afternoon, flanked by US marshals, lawyers and his parents. The bond, which matched the highest in federal court history, was reportedly secured by the 30-year-old entrepreneur’s parents, who pledged the equity in their home, and two wealthy individuals.
Bankman-Fried is accused by prosecutors of perpetrating “one of the biggest financial frauds in American history.” He was extradited from the Bahamas on Wednesday night and made his first court appearance on Thursday. He faces eight felony charges, including wire fraud, securities fraud, money laundering and campaign finance violations. If convicted on all counts, he could be sentenced to as many as 115 years in prison.
Assistant US Attorney Nick Roos argued that Bankman-Fried committed a fraud of “epic proportions,” but given that he voluntarily consented to extradition and lost most of his assets, the risk of letting him out on bail was a “marginal consideration.”
The bond was 25 times larger than that offered to Bernie Madoff, author of perhaps the most infamous Ponzi scheme in US history, in 2008. It matched the $250 million offered to Michael Milken, the “junk bond king” who pleaded guilty to stock manipulation and other charges in 1990.
Under his bail terms, Bankman-Fried was required to surrender his passport and remain in confinement at the home of his parents, who are both Stanford University law professors. He also must undergo mental health treatment and evaluation. He’s reportedly allowed to leave house arrest only for exercise and mental health and substance abuse treatment.
Bankman-Fried is scheduled to return to New York on January 3 for a pre-trial hearing in which he will enter his plea to the charges. Two of his top FTX associates, Caroline Ellison and Gary Wang, pleaded guilty to criminal charges and agreed to cooperate with the federal investigation of the company’s collapse.