FTX founder Sam Bankman-Fried to be released on $250m bail after first US court appearance

Former head of failed crypto exchange was extradited to US after arrest in Bahamas

Graeme Massie
Los Angeles
Friday 23 December 2022 00:20 GMT
FTX: Sam Bankman-Fried arrives back in US after extradition from Bahamas

FTX founder Sam Bankman-Fried will be released on $250m bail after he appeared in a US courtroom after being extradited to New York from the Bahamas to face fraud charges.

Prosecutors accused the 30-year-old former head of the failed cryptocurrency exchange of allegedly carrying out “one of the biggest financial frauds in US history”.

Mr Bankman-Fried, who has denied the charges against him, arrived back in the US on Wednesday night and appeared in court in New York for the first time on Thursday.

A federal judge in New York ruled that Mr Bankman-Fried could be released on bail in an agreement drawn up between prosecutors and his defence team. He will also be required to live at his parents’ home in Palo Alto, California.

Mr Bankman-Fried was at the centre of “a fraud of epic proportions,” assistant US attorney Nicolas Roos told the court.

While Mr Bankman-Fried was flown back to the US, prosecutors in Manhattan announced that two of his closest associates had been charged and pleaded guilty.

Carolyn Ellison, 28, the former chief executive of Mr Bankman-Fried’s trading firm, Alameda Research, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

US attorney Damian Williams said that both of them were cooperating and had agreed to assist in any prosecution. He also warned anyone else involved in the alleged fraud to cooperate with his office.

“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly, and our patience is not eternal,” he said.

Mr Bankman-Fried will appear again in court in New York on 3 January.

FTX collapsed in early November after mass customer withdrawals and the firm declared bankruptcy on 11 November.

Mr Bankman-Fried has accepted that there were risk-management failures at FTX but says that he has not acted criminally.

He faces wire fraud and securities fraud charges and could be sentenced to 115 years in prison if convicted.

Last month he claimed that he had not “knowingly” misused customers’ money and said he believed they will eventually be made whole again.

He made the comments during an interview with Andrew Ross Sorkin at a conference hosted by The New York Times.

“I didn’t ever want to commit fraud on anyone. I was shocked at what happened this month,” Mr Bankman-Fried said.

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