FTX founder Sam Bankman-Fried released on $250 million bond

A federal magistrate on Thursday ordered disgraced FTX founder Sam Bankman-Fried released on a $250 million personal recognizance bond signed by his parents and secured by their Palo Alto, California, home. A prosecutor called it the largest pretrial bond ever.

Bankman-Fried, who did not enter a plea during the brief hearing, appeared in a dark suit and tie with his distinctive mop of curly hair. Shackles were not visible around his ankles but echoed through the courtroom as he entered. Both of his parents, former Stanford Law professors, appeared in the gallery.

The 30-year-old crypto executive is charged with defrauding customers and investors in the now-bankrupt crypto exchange FTX. He made his initial appearance in a New York federal court hours after he arrived in the United States from the Bahamas, where he was arrested last week.

"Mr. Bankman-Fried perpetrated a fraud of epic proportions," assistant United States Attorney Nicholas Roos said. "The evidence is very strong."

In addition to the bond, Magistrate Judge Gabriel Gorenstein ordered Bankman-Fried's passport taken and his travel restricted. He will be under strict pretrial supervision, required to live with his parents at their house. He can go to the gym but otherwise his movements are limited and monitored by an ankle bracelet fitted before leaving court.

A U.S. government plane flew Bankman-Fried, 30, to New York, where federal prosecutors had charged him in an eight-count indictment for fraud, conspiracy and campaign finance violations linked to tens of millions of dollars in political donations.

Prosecutors from the Southern District of New York accused the once-heralded advocate for transparency in crypto with being a fraud from the moment he founded FTX, one of the largest cryptocurrency exchanges in the world.

According to the indictment, Bankman-Fried stole $8 billion from FTX investors and customers and used it to pay debts and expenses of Alameda Research, his privately held hedge fund. He also used the money to purchase lavish real estate and make political donations to mainly Democrats but also some Republicans as he sought influence in Washington, prosecutors said.

Bankman-Fried is due back in court Jan. 3 before Judge Ronnie Abrams, to whom the criminal case is assigned.

The only words Bankman-Fried uttered during Thursday's hearing were, "Yes I do," when asked by the judge whether he understood the consequences of bail jumping.

The judge imposed one other restriction: Bankman-Fried can open no new lines of credit and conduct no financial transaction in excess of $1,000 without court approval.

Gorenstein, however, noted that Bankman-Fried has achieved "sufficient notoriety," which decreases the likelihood he could transact business.

Before Bankman-Fried landed, prosecutors announced two key associates -- ex-girlfriend Caroline Ellison and FTX co-founder Gary Wang -- had quietly pleaded guilty to fraud and conspiracy charges and agreed to cooperate, a development that adds considerable heft to the criminal case against Bankman-Fried. Prosecutors suggested others could be charged.

"If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it," U.S. Attorney Damian Williams said in a videotaped statement, referring to Bankman-Fried's privately controlled hedge fund. "We are moving quickly and our patience is not eternal."

The Securities and Exchange Commission and the Commodity Futures Trading Commission filed related civil charges against Ellison and Wang, saying the two played an "active role" in the scheme.

"Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist," said SEC Chairman Gary Gensler.

John Ray, the new CEO of FTX, who also oversaw the dissolution of Enron, told members of a House committee last week that FTX lacked corporate controls to an extent he had never witnessed, characterizing the company's conduct as "old-fashioned embezzlement."

"I've never seen an utter lack of record keeping," Ray said. "Absolutely no internal controls."

Bankman-Fried, in an interview with ABC News' George Stephanopoulos in November, denied knowing "there was any improper use of customer funds."

"I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there," Bankman-Fried told Stephanopoulos. "A lot of people got hurt, and that's on me."

He also told ABC News that he had only $100,000 to his name and one working credit card.

The arrival of Bankman-Fried in New York followed dayslong uncertainty over whether he would waive his right to an extradition hearing in the Bahamas, where he lived in a $30 million penthouse while running FTX until it collapsed into bankruptcy in November.

After a chaotic court hearing on Monday and an unexpected absence from court on Tuesday, Bankman-Fried ultimately signed extradition papers. He was flown to an airport in Westchester, New York, on Wednesday night.