Sam Bankman-Fried released on $250 million bail

His fortune is, he assures, evaporated, but Sam Bankman-Fried can count on mum and dad. A New York federal judge on Thursday agreed to release the founder and former chief of bankrupt cryptocurrency trading platform FTX on a $250 million bond. “SBF” by his nickname claims to have less than $100,000 in his bank account, but his parents, according to New York Timesin particular, used as a bank guarantee their California house in Palo Alto, where he will be under house arrest pending his trial.

The most famous figure in the cryptocurrency world walked free from federal court in Manhattan at noon. Charged with fraud and criminal conspiracy in particular, “SBF” – his nickname – had been extradited from the Bahamas, where FTX’s headquarters were located, on Wednesday night after giving up contesting his surrender to US authorities.

A fortune of 26 billion dollars is skyrocketing

In late November, the central figure in the biggest scandal in the history of cryptocurrencies claimed to be broke. At its peak, at the start of the year, his fortune was estimated at $26 billion, based solely on the shares of his companies, which have since gone bankrupt.

The judge approved the release of the 30-year-old defendant because, according to him, he poses a “minimal” flight risk and has never been convicted before. Known for his dark t-shirts and shorts, “SBF” appeared at the hearing in a gray suit and tie.

Sam Bankman-Fried is suspected of having, together with collaborators, used funds deposited on the platform by FTX customers to carry out speculative financial transactions with his other company, the Alameda Research foundation.

In addition to risky transactions via Alameda, he is also suspected of having invested part of this money in real estate in the Bahamas and of having made donations to Democratic politicians – always with funds from FTX clients – including Joe Biden during his presidential campaign. Five of the eight charges against him each carry a maximum sentence of twenty years in prison. The one who has long been seen as an iconoclastic genius of cryptocurrencies is therefore likely to spend the rest of his life in prison.

Relatives cooperate

Manhattan federal prosecutors revealed Wednesday that two other key people in the case had recently been charged with fraud and criminal association. The latter has pleaded guilty and is cooperating with the government, which means they can incriminate Sam Bankman-Fried.

They are Caroline Ellison, former head of Alameda Research – and ex-girlfriend of SBF – and Gary Wang, co-founder of FTX, charged “in connection with their role in the fraud that contributed to the ‘collapse of FTX,'” Damian Williams said without elaborating .

Since FTX’s bankruptcy on November 11, Sam Bankman-Fried has repeatedly argued publicly that he had not been at the head of Alameda Research for several months, indirectly incriminating Caroline Ellison. An argument disputed by the prosecutor, who claims that “SBF” remained the main decision maker in Alameda until FTX filed for bankruptcy.

“If you have been involved in any wrongdoing at FTX or Alameda, now is the time to come forward,” Damian Williams warned Wednesday, urging fellow alumni of both companies to work with prosecutors. “We move quickly, and our patience does not last forever. »

Caroline Ellison and Gary Wang have also been subpoenaed by the two main US financial market regulators, the SEC and the CFTC. They promised to cooperate with the SEC and acknowledged the facts attributed to them by the CFTC, which should earn them, in both cases, a lighter sentence. The CFTC estimates the total funds misappropriated from FTX customer accounts to be $8 billion.

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