FTX’s Bankman-Fried, charged with ‘epic’ fraud, launched on $250 million bond By Reuters



© Reuters. Sam Bankman-Fried, the founder and former CEO of crypto forex alternate FTX, is escorted into the Justice of the Peace Court docket constructing in Nassau, Bahamas December 21, 2022. REUTERS/Marco Bello

(Corrects spelling of choose’s first identify, paragraph 4)

By Luc Cohen and Jody Godoy

NEW YORK (Reuters) -Sam Bankman-Fried was launched on a $250 million bond bundle on Thursday whereas he awaits trial over the collapse of the FTX crypto alternate, which a U.S. prosecutor referred to as a “fraud of epic proportions.”

Federal prosecutors in Manhattan have accused the FTX founding father of stealing billions of {dollars} in buyer funds to plug losses at his hedge fund, Alameda Analysis.

Bankman-Fried was not requested to enter a plea on Thursday. He has beforehand acknowledged risk-management failures at FTX, however has stated he doesn’t imagine he has prison legal responsibility. His protection lawyer, Mark Cohen, declined to remark after the listening to in Manhattan federal courtroom.

U.S. Justice of the Peace Decide Gabriel Gorenstein set Bankman-Fried’s subsequent courtroom date for Jan. 3, 2023, earlier than U.S. District Decide Ronnie Abrams, who will deal with the case.

Bankman-Fried based FTX in 2019. A increase within the values of bitcoin and different digital belongings propelled the alternate to a valuation of some $32 billion earlier this yr, making the Massachusetts Institute of Expertise (MIT) graduate a billionaire a number of instances over, in addition to an influential donor to U.S. political campaigns.

In granting him pretrial launch, Gorenstein stated Bankman-Fried had “achieved enough notoriety that it might be not possible” for him to have interaction in additional monetary schemes or to cover with out being acknowledged.

After Thursday’s courtroom look, the one-time billionaire was surrounded by photographers as he exited the decrease Manhattan courthouse and entered a black SUV. He sported facial stubble and a grey go well with – a far cry for the shorts and T-shirt he grew to become infamous for sporting in public appearances whereas working FTX.

Nicolas Roos, a prosecutor, instructed Gorenstein that the bail bundle would require Bankman-Fried to give up his passport and stay in residence confinement at his dad and mom’ residence in Palo Alto, California. He would even be required to bear common psychological well being remedy and analysis.

Roos stated that whereas Bankman-Fried had carried out a “fraud of epic proportions,” he had no historical past of flight and his monetary belongings had lowered considerably.

Bankman-Fried, 30, was arrested final week within the Bahamas, the place he lived and the place FTX relies, cementing his fall from grace. He departed the Caribbean nation in FBI custody on Wednesday evening.

Cohen stated he agreed with prosecutors’ proposed bail circumstances. He famous that Bankman-Fried’s dad and mom – each Stanford Legislation Faculty professors – would co-sign the bond and submit the fairness of their residence as assurance for his return to courtroom. Each appeared on the listening to.

“My shopper remained the place he was, he made no effort to flee,” Cohen stated.

The bond is supposed to make sure that if Bankman-Fried flees, the federal government may confiscate the household’s belongings – together with their Palo Alto residence – as much as $250 million. Reuters couldn’t decide the household’s whole web value.

Bankman-Fried stated at a New York Instances convention on Nov. 30, following the alternate’s collapse, that he had $100,000 in his checking account.

‘SUFFICIENT NOTORIETY’

Sporting leg restraints, Bankman-Fried sat flanked by his legal professionals and nodded when the choose knowledgeable him that if he fails to seem in courtroom, a warrant can be issued for his arrest. Gorenstein stated circumstances additionally included digital monitoring through a tool to be fitted earlier than he left courtroom, and a ban on opening new traces of credit score or companies.

He spoke solely when requested by Gorenstein whether or not he understood the circumstances of his launch, and that he may very well be charged with an extra crime if he fails to point out as much as courtroom.

“Sure I do,” Bankman-Fried replied.

However considerations about commingling of funds between FTX and Alameda led to a flurry of buyer withdrawals in early November, finally forcing the alternate to declare chapter on Nov. 11.

Roos stated that proof at trial would include testimony from “a number of cooperating witnesses,” in addition to hundreds of pages of written communications.

Simply hours after Bankman-Fried’s airplane from the Bahamas took off, Damian Williams, the highest federal prosecutor in Manhattan, introduced that two of Bankman-Fried’s closest associates – former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang – had pleaded responsible and had been cooperating with prosecutors.

Particulars of their cooperation had been saved beneath wraps till Bankman-Fried left the Bahamas, based on courtroom papers filed on Thursday.



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