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US Magistrate Judge Gabriel Gorenstein set Bankman-Fried’s next court date for January 3, 2023, before US 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 US$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 US 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 recognised.
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 grey 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.
Sam Bankman-Fried in court on Thursday. Photo: Jane Rosenberg via Reuters
“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 US$250 million. Reuters could not determine the family’s total net worth.
Bankman-Fried said at a New York Times conference on November 30, following the exchange’s collapse, that he had US$100,000 in his bank account.
Wearing leg restraints, Bankman-Fried sat flanked by his lawyers and nodded when the judge informed him that if he fails to appear in court, a warrant would be issued for his arrest.
Gorenstein said conditions also included electronic monitoring via a device to be fitted before he left court, and a ban on opening new lines of credit or businesses.
He spoke only when asked by Gorenstein whether he understood the conditions of his release, and that he could be charged with an additional crime if he fails to show up to court.
Barbara Fried, FTX co-founder Sam Bankman-Fried’s mother. Photo: Bloomberg
“Yes I do,” Bankman-Fried replied.
But concerns about commingling of funds between FTX and Alameda led to a flurry of customer withdrawals in early November, ultimately forcing the exchange to declare bankruptcy on November 11.
Roos said that evidence at trial would consist of testimony from “multiple cooperating witnesses”, as well as thousands of pages of written communications.
Details of their cooperation were kept under wraps until Bankman-Fried left the Bahamas, according to court papers filed on Thursday.
Additional reporting by Associated Press