On Thursday, Sam Bankman-Fried was freed on a $250 million bail while awaiting trial for the FTX crypto exchange collapse, which a US prosecutor dubbed “fraud of historic proportions.”
Denied Criminal Culpability
Manhattan federal prosecutors have accused the FTX founder of diverting billions in client cash to cover losses at his hedge fund, Alameda Research.
Thursday did not need Bankman-Fried to plead. He admitted FTX risk-management failings but denied criminal culpability. Mark Cohen, his defence attorney, refused to comment following the Manhattan federal court session.
Bankman-next-door Fried’s next court appearance is on January 3, 2023, before US District Judge Ronny Abrams.
FTX 2019 By Bankman-Fried
The exchange was valued at $32 billion early this year due to a bitcoin and other digital asset bubble, making the MIT graduate a multi-billionaire and a major political contributor.
Gorenstein granted him pretrial release because Bankman-Fried had “achieved such notoriety that it would be difficult” for him to commit new financial schemes or conceal them.
Also read: FTX was engaged in a ‘massive, years-long fraud’: US .
The former billionaire left the lower Manhattan courtroom in a black SUV, surrounded by cameras, on Thursday. He wore a grey suit and beard, unlike his shorts and T-shirt when running FTX.
Prosecutor Nicolas Roos told Gorenstein that the bail package required Bankman-Fried to forfeit his passport and live with his parents in Palo Alto, California. He would need frequent mental health care and assessment.
Roos claimed Bankman-Fried committed a “fraud of epic dimensions,” but had no history of flight and had drastically decreased his financial holdings.
Last Monday, Bankman-Fried was detained in the Bahamas, where FTX is located. He left the Caribbean island in FBI custody Wednesday night.
Cohen accepted prosecutors’ bail restrictions. The banker’s parents, Fried and Fried, both Stanford Law School professors, would co-sign the bond and put up their home equity to guarantee his return to court. Both attended.
Fraud of Epic Dimensions
Cohen maintained that his client did not run.
If Bankman-Fried escapes, the bond allows the government to seize the family’s assets, including their Palo Alto mansion, up to $250 million. Reuters couldn’t calculate the family’s net worth.
$100,000 in Bank Account When the Exchange collapsed.
Bankman-Fried sat with his attorneys in leg shackles and agreed when the judge told him he would be arrested if he didn’t show up.
Gorenstein said the terms included electronic monitoring through a device to be installed before he left court and a prohibition on creating new credit lines or enterprises.
Also read: FTX, The Third Largest Cryptocurrency Exchange In The United States, Declares Bankruptcy
He only spoke when Gorenstein questioned whether he understood his release terms and that he may be charged with another felony if he didn’t show up to court.
“Yes,” Bankman-Fried said.
Worried About FTX and Alameda
But clients pulled out of the exchange at the beginning of November because they were worried about FTX and Alameda mixing their assets. This caused the exchange to declare bankruptcy on November 11.
Roos said that the trial will have “many witnesses who work together” and “hundreds of pages” of written conversations.
Damian Williams, Manhattan’s chief federal prosecutor, stated that two of Bankman-Closet Fried’s allies, former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang, had pleaded guilty and were collaborating with authorities only hours after her jet left the Bahamas.
According to Thursday court filings, Bankman-Fried fled the Bahamas before disclosing their collaboration.
Source: https://www.businesstoday.in/