Sam Bankman-Fried released on $250 million bail

FTX co-founder Sam Bankman-Fried, suspected of multibillion-dollar fraud, released on $250 million bail by New York federal court.

Yesterday, December 22, Sam Bankman-Fried appeared in federal court in New York, and Judge Gabriel Gorenstein agreed to release him on bail. Bankman-Fried’s parents’ home in Palo Alto, California was offered as collateral. Note that under US law, assets worth 10% of the amount of the pledge can act as collateral.

Lawyers have also prepared an extensive list of restrictions that Sam Bankman-Freed must not violate in order to remain at large during the investigation. For example, he cannot take out new loans and make financial transactions in excess of $1,000. In addition, he was forbidden to leave the household, except for attending drug treatment and visiting a psychotherapist.

Sam Bankman-Freed handed over his passport to the bailiffs and agreed to wear a tracking device. According to Judge Gorenstein, such measures will provide a sufficient degree of confidence that the founder of FTX will not abscond. In addition, given the financial nature of the crimes, Bankman-Freed is unlikely to pose a threat to anyone, the judge said.

But Andrew Lankler, a partner at law firm Baker Botts, fears that Bankman-Fried is likely to escape. He cited the example of Bernie Madoff, who was arrested in 2008 on charges of creating a $50 billion pyramid scheme. He was released on $10 million bail. Subsequently, Madoff received 150 years in prison and died in custody. There is a risk that Bankman-Freed will not want to repeat the fate of Madoff and will try to escape.

Earlier, Alameda Research top manager Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to fraud. They are cooperating with the investigation.