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‘Highly restrictive’ US bail for FTX founder

Sam Bankman-Fried has appeared in a US courtroom after being extradited from the Bahamas to face multibillion-dollar fraud charges.

Prosecutors said the FTX founder had carried out a “fraud of epic proportions” and that the government was proposing a highly-restrictive bail package.

At the arraignment in Manhattan federal court, Mr Bankman-Fried was expected to be asked to enter a plea. Prosecutors have accused him of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research.

Nicolas Roos, a prosecutor, told US Magistrate Judge Gabriel Gorenstein that the government was proposing a bail package that included a $US250 million ($371 million) bond, home detention and location monitoring. Mr Bankman-Fried will also have to surrender his passport.

Mr Bankman-Fried’s defence counsel said he agreed with these conditions.

Mr Bankman-Fried, 30, was arrested last week in the Bahamas, where he lived and where FTX is based, cementing the one-time billionaire’s fall from grace. He departed the Caribbean nation in FBI custody on Wednesday night.

Mr Bankman-Fried has acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability. At a court hearing in the Bahamas on Wednesday, his lawyer there, Jerone Roberts, read an affidavit in which Mr Bankman-Fried said he had agreed to extradition in part out of a “desire to make the relevant customers whole.”

Just hours after his plane took off, US prosecutors said two of his closest former associates had pleaded guilty and were cooperating with their probe – a move that significantly ramped up pressure on Mr Bankman-Fried.

“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Damian Williams, the top federal prosecutor in Manhattan, said in a video posted on Twitter on Wednesday night.

“We are moving quickly and our patience is not eternal.”

A son of two Stanford Law School professors and a graduate of the Massachusetts Institute of Technology, Mr Bankman-Fried rode a boom in the value of bitcoin and other digital assets to become a billionaire several times over as well as influential donor to US political campaigns.

But in early November, reports that FTX commingled customer funds with Alameda led to a wave of withdrawals from FTX, ultimately prompting the exchange – valued at $US32 billion ($48 billion) as recently as January 2022 – to declare bankruptcy. Cryptocurrency exchanges like FTX allow users to buy and sell digital assets.

Mr Bankman-Fried stepped down as CEO on November 11, the same day as the bankruptcy filing.

-AAP

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