The disgraced crypto entrepreneur was freed on $250 million bond, but is due back in court in early January on federal fraud charges.
Free on bail, Bankman-Fried faces “epic” legal fight
The disgraced crypto tycoon Sam Bankman-Fried, who revealed to The Times last month that his personal wealth had shrunk to $100,000, won't be spending the holidays in jail. On Thursday, he and his defense team reached an enormous $250 million bond agreement that resulted in his release from federal jail.
The terms are highly restrictive.
The 30-year-old Joe Bankman-Fried, a lecturer at Stanford Law School, had to surrender his passport and will continue to live with his parents in California under house arrest. He must get a mental health evaluation, wear a bracelet that tracks his activities, and obtain government or court approval for any spending that exceed $1,000.
Prior to Mr. Bankman-Fried boarding a flight on Wednesday night to return to the United States, the bail agreement was arranged. His parents would be responsible for the $250,000,000 bond hit if he skipped a court appearance or fled.
The legal case against him is moving swiftly.
The next court date for Mr. Bankman-Fried is set for January 3 in Manhattan before U.S. District Judge Ronnie Abrams.
Prosecutors allege that Mr. Bankman-Fried masterminded “fraud of epic proportions,”
claiming that he stole money from clients to support Alameda Research, the company's trading division. A long list of debtors was left behind after FTX lost billions as a result of the collapse of the cryptocurrency market. Federal prosecutors have also accused Bankman-Fried of breaking campaign funding laws.
Top associates have already turned on him.
Gary Wang, the former chief technology officer of FTX, and Caroline Ellison, who oversaw Alameda Research, both of whom were his former housemates, entered guilty pleas this week and are now working with the police. Attorneys are asking more insiders to come forward.
The S.E.C. pushed back against calls for new laws to protect crypto investors.
SEC Chair Gary Gensler stated that the current regulations were sufficient in an interview with The Times on Thursday, adding that it was up to the industry participants to comply. The road is getting shorter, he warned, adding that cryptocurrency companies needed to register with his organization or risk being subject to regulatory procedures.
Additional FTX news:
- The crypto lender BlockFi's claim to more than $440 million worth of Bankman-shares Fried's in the online trading platform Robinhood was contested by FTX's current management team.
- Armanino, FTX's U.S. business auditor, defended its work for Bankman-Fried even as it announced it would stop handling digital assets by the end of the next month.