Sam Bankman-Fried, the founder of now embattled crypto exchange FTX, has been allowed to pay a whopping $250 million bond and house arrest in his parent's home in California as bail terms, a day after he was extradited to the US from Bahamas. A $250 billion bond is believed to be the highest federal pretrial bond, which will be paid by Bankman-Fried’s parents as bail charges.
According to the assistant US attorney Nicolas Roos, the main reason behind Bankman-Fried’s bail is because he agreed for extradition from the Bahamas to the US last week. Apart from payment of $250 million bond, other bail conditions include he is not allowed to open any new lines of credit, start a business, and a financial transaction of more than $1,000 without the approval from the court or the government.
Bankman-Fried, who has often been touted as the ‘crypto king,’ is awaiting trial in the US for looting customers and investors by swindling money from FTX to his own firm Alameda Research. Both, despite being owned by Fried, are supposed to be two different entities. Bankman-Fried is undergoing trial at 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’s co-founder Gary Wang, and Carolyn Ellison, the chief executive of Alameda Research have also pleaded guilty of wire fraud, securities fraud and commodities fraud, among others on Monday. Meanwhile, seven others including an Indian-origin techie Nishad Singh are under SEC's scrutiny for financial discrepancy at the crypto exchange that ultimately led to its collapse.
The financial discrepancies of FTX came to light after CoinDesk, a crypto news website on November 2 reported close links between Alameda Research and FTX as the now-leaked balance sheets of the hedge fund showed unusually heavy amounts of FTT tokens. Bankman-Fried, who resigned from FTX on November 11, has been accused of secretly moving $10 billion of FTX customer funds to Alameda Research.
Of this, a major chunk worth $1.7 billion has been missing. FTX, however, said the crypto exchange was hacked and a financial discrepancy was witnessed during the transfer of 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 FTX collapse, in the past two months, other crypto firms have also either filed for bankruptcy or have decided to sell their assets. Last week, bankrupt crypto lender Voyager Digital said it will 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 comprised $1.31 billion worth of Voyager’s cryptocurrency and an additional $111 million, to help the crypto firm with bankruptcy and protect Voyager’s customers and clients.
Last month, BlockFi Inc and eight of its affiliates filed for bankruptcy. BlockFi has more than 1,00,000 creditors with liabilities and assets ranging from $1 billion to $10 billion. FTX-US, which is a US-based subsidiary of the now embattled FTX, is the second-largest creditor of BlockFi and has extended a loan worth $275 million.
Leave a Comment
Your email address will not be published. Required field are marked*