Sam Bankman-Fried Freed On $250 Million US Bail While Former Executives Cooperate Case Against Him | CBC News

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Sam Bankman-Fried will be released to his parents’ home while he awaits trial on fraud charges after accepting an unprecedented $250 million US bail.

Bankman-Fried has been accused of stealing billions of dollars in funds from FTX clients to hide and offset losses at its hedge fund, Alameda Research, before the bankruptcy of both companies and others last month.

Bankman-Fried, 30, built his crypto empire in the Bahamas, where he has lived since his businesses collapsed in November. But events moved quickly this week after he was arrested by Bahamian authorities and then extradited to New York on Wednesday night.

Bankman-Fried’s defense attorney, Mark Cohen, argued that his client was happy to comply with any conditions if he were released before his trial.

“My client stayed where he was, he made no effort to flee,” Cohen said in a New York courtroom Thursday.

Wearing a gray suit and leg restraints, Bankman-Fried sat flanked by his lawyers and nodded when the judge informed him that if he did not appear in court, a warrant would be issued for his arrest.

The bail package required Bankman-Fried to surrender her passport and remain in home confinement at her parents’ home in Palo Alto, California. She would also be required to undergo regular mental health evaluation and treatment.

His parents, both Stanford Law School professors, co-signed the bond and deposited their home equity as security for Bankman-Fried’s return to court.

CLOCK | 2 former FTX executives accept a plea agreement and will cooperate:

US Attorney Announces Guilty Pleas Related to Cryptocurrency Trading Platform FTX

Manhattan US Attorney Damian Williams says two former associates of FTX founder Sam Bankman-Fried have pleaded guilty to fraud charges and are cooperating with the government.

Although he acknowledged that he made mistakes, in a series of media interviews, Bankman-Fried rejected the idea that he did anything illegal or to benefit himself. After peaking at more than $25 billion earlier this year, Bankman-Fried says his personal net worth currently consists of around $100,000.

Prosecutor Nicolás Roos called the package “the largest pre-trial bail.”

Magistrate Judge Gabriel W. Gorenstein asked Bankman-Fried if he understood that he would face arrest and a $250 million debt if he chose to flee.

“Yes, I do,” Bankman-Fried replied.

Others have agreed to cooperate

Two other FTX executives, Caroline Ellison and Gary Wang, pleaded guilty to fraud charges earlier this week, but are said to be cooperating with investigators in exchange for a more lenient sentence.

Ellison, 28, was chief executive of Alameda Research, while Wang, 29, was a co-founder of FTX.

“They are both cooperating with the Southern District of New York,” U.S. Attorney Damian Williams said Wednesday night in a video statement posted to social media.

Before Bankman-Fried’s extradition on Wednesday, neither Wang nor Ellison had said anything publicly and prosecutors had not indicated they faced possible criminal charges or committed to working with investigators. It was not clear if Bankman-Fried, who has apologized for FTX’s collapse but denied defrauding anyone, was also unaware that his former executives were cooperating.

He added that anyone else found to have participated in the fraud should contact his office because “our patience is not forever” and further criminal charges may be filed against others.

A white plane is seen on a runway at night with a green hangar in the background.
A plane heads towards the runway in Nassau, Bahamas, with Bankman-Fried on board when he was extradited to the United States. Bahamian authorities arrested Bankman-Fried last week at the request of the US government. (Joe Raedle/Getty Images)

Ellison and Wang signed plea agreements on December 19, in part in exchange for a promise that prosecutors would recommend a reduction in their sentences if they fully cooperated in the investigation.

Without such an agreement, Ellison, who also faces a money laundering conspiracy charge, could face up to 110 years in prison. Wang could get up to 50 years.

out on bail

Both were released on US$250,000 bail after their secret court appearances with restricted travel to the continental United States.

“Gary has accepted responsibility for his actions and takes his obligations as a cooperating witness seriously,” said Wang’s lawyer, Ilan Graff.

An attorney for Ellison did not immediately return messages seeking comment.

Wang created the software code that allowed Alameda to siphon funds from FTX clients. Ellison then used the embezzled funds for Alameda’s business activity, the SEC said.

Bankman-Fried, 30, could spend the rest of his life in prison.

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