Parents Pay $250 Million Bail to Secure Release of Sam Bankman-Fried After Extradition to US

Parents Pay 0 Million Bail to Secure Release of Sam Bankman-Fried After Extradition to US

A federal judge released FTX co-founder Sam Bankman-Fried on a $250 million bail Thursday but the ‘crypto king’ will still undergo trial on criminal fraud charges due to the collapse of the FTX crypto exchange.

Sam Bankman-Fried’s parents secured his bail and US magistrate judge Gabriel Gorenstein of the federal court in Manhattan has set a long list of requirements so that he can remain free while still facing charges.

Bankman-Fried cannot make financial transactions for more than $1,000 and also cannot open new lines of credit.

He has to remain inside his house except to exercise and he will have to undergo substance-abuse and mental-health treatment, the agreement said, according to a report by Coindesk.

The former CEO of FTX arrived at the courthouse in a crumpled suit jacket, with his restraints on.

He was extradited from the Bahamas earlier this week after he did not challenge the US extradition order. He claims that he has only $100,000 left in the bank and he will now have to live with his parents’ home in Palo Alto, California.

The judge’s order said that the house has been put up as collateral.

Stanford Law professors Joseph Bankman and Barbara Fried are the parents of the embattled crypto-exchange CEO. He will also be subjected to electronic monitoring.

FTX and its sister trading house Alameda Research went bankrupt last month and were once valued at $32 billion.

It was found out by investigators that the global cryptocurrency exchange illegally transferred money to fund trades, which ran into massive losses and destroyed $10 billion of customer funds.

The new management which now controls FTX said they have not seen such large-scale financial mismanagement.

US Attorney Damian Williams last week accused Sam Bankman-Fried – once touted to be next Warren Buffett – to have committed ‘one of the biggest financial frauds in American history’, according to a report by CNBC.

Sam-Bankman Fried and his associates stand accused of defrauding customers, lenders and investors and also of flouting campaign-finance rules by making illegal political contributions.

The Coindesk report said that several notable people belonging to the FTX inner circle like Caroline Ellison, the former CEO of FTX’s sister company Alameda Research, and Gary Wang, the other co-founder of FTX, have pled guilty to federal charges levelled against them.

Barbara Fried, mother of FTX founder Sam Bankman-Fried, arrives at court in New York. His parents agreed to sign a $250 million bond and secured his bail (Image: AP Photo)

They also admitted that they stand guilty in securities violations, Coindesk said citing statements from US prosecutors and regulators.

Prosecutors have been closing in on the disgraced crypto frontman, inking plea deals inside the FTX inner circle. Caroline Ellison, the former CEO of FTX’s sister company Alameda Research, and Gary Wang, the other co-founder of FTX, pleaded guilty to federal charges and also admitted guilt in securities violations, according to statements from US prosecutors and regulators late Wednesday.

At least, five of the eight counts against Bankman-Fried carry a maximum sentence of 20 years in prison each and the US Securities and Exchange Commission has separately accused him of violating securities laws, news agency AFP reported.

The SEC and the Commodity Futures Trading Commission (CFTC) earlier this week said that they have filed civil suits against Ellison and Wang.

After FTX was founded in 2019, it rose spectacularly to become one of the leading cryptocurrency exchanges in the world of crypto.

Sam Bankman-Fried appeared on magazine covers, appeared in financial summits and drew huge investments from prominent fund managers and venture capitalists.

He also made political contributions.

However, in November 2022, separate reports by the Wall Street Journal and Coindesk revealed that Alameda Research, a sister company also founded by Bankman-Fried, was based and built on the FTT currency.

The FTT currency was a token created by FTX which had no independent value.

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