Sam Bankman-Fried to Post $250 Million Bail; stay under house arrest
Sam Bankman-Fried, the founder of now-beleaguered crypto exchange FTX, was allowed to post $250 million bail and house arrest at his parents’ home in California as bail, a day after his extradition to the United States from the Bahamas. A $250 billion bail is believed to be the highest provisional federal bail, which will be posted by Bankman-Fried’s parents as bail.
According to Assistant U.S. Attorney Nicolas Roos, the main reason for Bankman-Fried’s bail is that he agreed to extradition from the Bahamas to the United States last week. Besides paying a $250 million bond, other bail conditions include that he is not allowed to open new lines of credit, start a business and conduct any financial transaction. over $1,000 without court or government approval.
Bankman-Fried, who has often been touted as the “king of crypto,” is awaiting trial in the United States for plundering customers and investors by scamming money from FTX to his own company Alameda Research. The two, although owned by Fried, are meant to be two different entities. Bankman-Fried is on trial in a courthouse in Manhattan, New York, based on the case filed by the US Department of Justice and the Securities and Exchange Commission (SEC), against him.
FTX co-founder Gary Wang and Carolyn Ellison, managing director of Alameda Research, also pleaded guilty to wire fraud, securities fraud and commodities fraud, among other charges on Monday. Meanwhile, seven other people, including Indian-born tech Nishad Singh, are under scrutiny by the SEC for financial misconduct at the crypto exchange that ultimately led to its collapse.
FTX’s financial discrepancies came to light after CoinDesk, a crypto news website, reported close ties between Alameda Research and FTX on November 2, as the hedge fund’s now-disclosed balance sheets showed unusually high amounts of FTT tokens. Bankman-Fried, who resigned from FTX on Nov. 11, was accused of secretly transferring $10 billion in FTX client funds to Alameda Research.
Of this amount, a significant portion worth $1.7 billion was missing. FTX, however, said the crypto exchange was hacked and found a financial gap when transferring its funds worth $600 million. It filed for bankruptcy on November 11 under Section 11 of the United States Bankruptcy Code.
As a knee-jerk reaction to the collapse of FTX, over the past two months other crypto companies have also filed for bankruptcy or decided to sell their assets. Last week, bankrupt crypto lender Voyager Digital announced that it would sell its assets worth $1.02 billion to Binance. In September, FTX won an auction to acquire Voyager Digital’s assets worth $1.42 billion, which included $1.31 billion worth of Voyager cryptocurrency and another $111 million. to help the crypto company go bankrupt and protect Voyager customers and clients.
Last month, BlockFi Inc and eight of its subsidiaries filed for bankruptcy. BlockFi has over 1,00,000 creditors with liabilities and assets ranging from $1 billion to $10 billion. FTX-US, which is a US subsidiary of the now-beleaguered FTX, is BlockFi’s second largest creditor and has provided a loan worth $275 million.
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