Bankman-Fried, charged with 'epic' fraud, released on $250 mln bond

Sam Bankman-Fried was released on a $250 million bond package on Thursday while he awaits trial over the collapse of the FTX crypto exchange, which a U.S. prosecutor called a "fraud of epic proportions."

Federal prosecutors in Manhattan have accused the FTX founder of stealing billions of dollars in customer funds to plug losses at his hedge fund, Alameda Research.

Bankman-Fried was not asked to enter a plea on Thursday. He has previously acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability. His defense lawyer, Mark Cohen, declined to comment after the hearing in Manhattan federal court.

U.S. Magistrate Judge Gabriel Gorenstein set Bankman-Fried's next court date for Jan. 3, 2023, before U.S. District Judge Ronny Abrams, who will handle the case.

Bankman-Fried founded FTX in 2019. A boom in the values of bitcoin and other digital assets propelled the exchange to a valuation of some $32 billion earlier this year, making the Massachusetts Institute of Technology (MIT) graduate a billionaire several times over, as well as an influential donor to U.S. political campaigns.

In granting him pretrial release, Gorenstein said Bankman-Fried had "achieved sufficient notoriety that it would be impossible" for him to engage in further financial schemes or to hide without being recognized.

After Thursday's court appearance, the one-time billionaire was surrounded by photographers as he exited the lower Manhattan courthouse and entered a black SUV. He sported facial stubble and a gray suit - a far cry for the shorts and T-shirt he became notorious for wearing in public appearances while running FTX.

Nicolas Roos, a prosecutor, told Gorenstein that the bail package would require Bankman-Fried to surrender his passport and remain in home confinement at his parents' home in Palo Alto, California. He would also be required to undergo regular mental health treatment and evaluation.

Roos said that while Bankman-Fried had carried out a "fraud of epic proportions," he had no history of flight and his financial assets had reduced significantly.

Bankman-Fried, 30, was arrested last week in the Bahamas, where he lived and where FTX is based, cementing his fall from grace. He departed the Caribbean nation in FBI custody on Wednesday night.

Cohen said he agreed with prosecutors' proposed bail conditions. He noted that Bankman-Fried's parents - both Stanford Law School professors - would co-sign the bond and post the equity in their home as assurance for his return to court. Both appeared at the hearing.

"My client remained where he was, he made no effort to flee," Cohen said.

The bond is meant to ensure that if Bankman-Fried flees, the government could confiscate the family's assets - including their Palo Alto home - up to $250 million.