Failed crypto founder Sam Bankman-Fried heard the news no young man wants to hear Thursday: “sorry son, you’re moving back in with your parents.” For all the young people who lived with their folks into their 20s, let’s just hope for his sake that the old man didn’t get rid of his old childhood bed.
New York federal court Judge Gabriel Gorenstein allowed FTX co-founder Bankman-Fried to be released on a $250 million bond, which also included “strict” supervision while forcing him to remain at his parent’s home in California. The bail was secured thanks to a deal between prosecutors and the FTX ex-CEO’s legal team that finally got Bankman-Fried to agree to extradition.
According to CNBC, the judge said the crypto founder, who often goes by his initials SBF, will also need to wear an electronic monitoring bracelet, go in for mandatory mental health counseling, and limit his movements to the Northern District of California. AP reported from the courtroom that Assistant U.S. Attorney Nicolas Roos recommended these strict bail terms calling it “fraud of epic proportions.” He echoed previous statements from U.S. Attorney for the Southern District of New York Damian Williams who called the FTX case “one of the biggest financial frauds in American history.”
SBF has been charged with eight counts of wire fraud and conspiracy to commit securities fraud, money laundering, and violating campaign finance laws—all centered around his crypto exchange FTX. All in all, the charges equate to a max of 115 years in prison, but that total is a bit of a stretch especially noting other recent major fraud convictions.
There’s an open question of how much money SBF has left after the absolute failure of his exchange that was once worth $32 billion. The crypto founder has been pulled off the Bloomberg and Forbes list of richest billionaires. The once-billionaire recently stated his wealth was limited to just $100,000, though the conditions of his bail require he not open any lines of credit larger than $1,000. You can expect he’ll be asking his folks for their credit cards for any major purchases.
Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, are both Stanford University professors, and both were reportedly present in the courtroom. The crypto founder himself was there as well but was flanked by two U.S. marshals. CNBC noted the alleged fraudster’s parents would be required to use equity in their home to satisfy bail.
Reported documents from the Bahamas showed that FTX and his parents bought millions of dollars worth of property, including condominiums. The pair were there with their son in the Bahamas, sitting in during the contested extradition proceedings.
SBF’s next hearing is set for Jan. 3. Any potential trial is likely to get deep into SBF’s alleged dealings. Late on Thursday prosecutors revealed they flipped former execs for Bankman-Fried’s crypto empire, leading to the current charges. FTX co-founder Gary Wang and Caroline Ellison, ex-CEO of SBF’s hedge fund Alameda Research, have pleaded guilty to federal charges including wire fraud, securities fraud, and conspiracy.