The disgraced cryptocurrency entrepreneur was released on $250 million bond but must return to court in early January on federal fraud charges.
Free on bail, Bankman-Fried faces “epic” legal fight
Even though Sam Bankman-Fried, a former crypto mogul who reported to The Times last month that he was worth only $100,000, will not be spending the holidays behind bars, he will be spending time with his family. On Thursday, he and his legal team negotiated a massive $250 million bond deal to get him out of federal custody.
Very limited freedom is being granted by these terms.
Mr. Bankman-Fried, now 30, is under house arrest at the California home of his parents, Joe Bankman and Barbara Fried, both professors at Stanford Law School. He was ordered to surrender his passport. A tracking bracelet has been placed on him, an evaluation of his mental health is required, and any expenditures over $1,000 will require government or court approval.
Before Mr. Bankman-Fried flew back to the United States on Wednesday night, the bail deal was negotiated. His parents are on the hook for the $250,000,000 bond if he fails to appear in court or absconds.
The proceedings against him are moving along quickly.
U.S. District Judge Ronnie Abrams is set to hear Mr. Bankman-case Fried’s on January 3 in Manhattan.
Prosecutors claim that Mr. Bankman-Fried orchestrated a “fraud of epic proportions” by using customer funds to keep the firm’s trading arm, Alameda Research, afloat. Due to the global impact of the crypto market crash, FTX has accumulated a long list of creditors. Additionally, Bankman-Fried is being investigated for possible violations of federal campaign finance laws.
Many of his closest allies have already betrayed him.
His former roommates, Alameda Research CEO Caroline Ellison and FTX CTO Gary Wang, both pleaded guilty this week and are helping the government. More government informants are being encouraged to turn by the prosecution.
The S.E.C. opposed proposed legislation meant to safeguard cryptocurrency holders’ investments.
S.E.C. Chair Gary Gensler told The Times on Thursday that the regulations currently in place were sufficient and that it was up to the industry to comply. He warned crypto firms that the “road is getting shorter” if they did not register with his agency.
In other FTX news:
- The current leadership at FTX disputed a claim by crypto lender BlockFi to over $440 million in Robinhood shares owned by Bankman-Fried.
- While admitting it would stop auditing digital assets at the end of this month, FTX’s U.S. business auditor, Armanino, defended its work for Bankman-Fried.
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