Amidst ongoing investigations into the collapse of FTX, the US court in Manhattan has now granted a whooping $250 million bail to Sam Bankman-Fried. As per report, the bail, as approved by the US Magistrate Judge Gabriel Gorenstein, will put the FTX co-founder on home detention. More so, SBF must surrender his passport and will be under severe location monitoring.
Worth noting that his parents secured the $250 million bail with the equity in their house. As revealed, the FTX co-founder only had $100,000 in his bank account. During the periods of the bail, he is expected to stay at his parents house. Notably, Judge Gorenstein also approved a mental health treatment and evaluation for Bankman-Fried, who is allegedly enduring depression.
Meanwhile, his defense lawyer, Mark Cohen stated that SBF has agreed to the terms offered. Recall that the FTX co-founder had earlier admitted to risk-management failures at FTX. However, he believes that the issue has no criminal liability. Now, the Court plans to continue the trial by January 3, 2023 before a new judge,Ronny Abrams, who will handle the case.
FTX saga putting investors in a state of dilemma
Regrettably, the collapse of FTX has put its investors and the industry into a state of dissaray. This thus compelled investigators across the world to commence a probe of the saga. Just yesterday, Binbits reported that the US SEC charged former Alameda Research CEO, Caroline Ellison and Former FTX co-founder, Gary Wang with fraud. According to the US regulator, the duo allegedly defrauded investors with troubled crypto exchange, FTX. The US regulator announced the charges in its latest Twitter post.
According to SEC, Ellison and Bankman-Fried, connived between 2019 and 2022 to manipulate the price of FTT, the native token of the troubled FTX. The duo achieved this by purchasing large quantities of the token on the open market to inflate its price. Also, the US regulator maintained that the FTT token, during these periods, became used as collateral for undisclosed loans by FTX of its customers’ assets to Alameda. Worthy of note that Alameda and FTX are co-owned by Bankman-Fried and Wang, but run by Ellison.
However, through the manipulation the value of FTT, Ellison inflated Alameda’s FTT holdings. This thus resulted in the overstatement of the collateral value of Alameda’s balance sheet, thereby misleading investors. According to the US regulator, these FTX executives amassed billions of dollars through the illicit dealings. Their activities, as revealed, violates the anti-fraud provisions of the Securities Act of 1933 and the securities exchange act of 1934.
Wang and Ellison pleads guilty to the fraud charges
Wang and Ellison pleaded guilty to the fraud charges. As for SBF, his arrest unfolded last week in Bahamas. The Bahamas authorities then decided to extradite him to the US early this week. According to reports, the US SEC filed several criminal charges against SBF. Some of these charges include wire fraud, securities fraud and money laundering.