Sam Bankman-Fried to stay at parents’ Stanford home while on $250m bail

STANFORD — Former FTX cryptocurrency billionaire Sam Bankman-Fried gained permission Thursday for a sweet alternative to awaiting trial in jail: He’ll reside at his parents’ home in the tony Upper San Juan neighborhood nestled in the southern part of Stanford University’s campus.

Preparations have been underway for days for Bankman-Fried, once hailed as the king of crypto and now charged with wide-ranging fraud, to return to the community where he grew up after posting $250 million bail.

Sheriff deputies, campus public safety and private security set up barriers throughout the Stanford neighborhood just after 1 p.m. on Thursday in anticipation of Bankman-Fried’s arrival, blocking off any chance for a curious onlooker to catch a glimpse of his return.

Neighbors and cyclists trekked along the oak-lined sidewalks, chatting with authorities who stood careful watch in a neighborhood once home to two U.S. presidents and a secretary of state. The area, more akin to a country club than university housing, is where dozens of senior Stanford faculty and their widows live. That includes Bankman-Fried’s parents, both professors at the university’s law school.

Bankman-Fried’s stunning fall — from living in an eight-figure Bahamas penthouse to a prison on the island after being charged with allegations that he swindled investors through his cryptocurrency company FTX — ended in extradition from the Bahamas.

Assistant U.S. Attorney Nicolas Roos said in federal court in Manhattan that Bankman-Fried, 30, “perpetrated a fraud of epic proportions.” Roos proposed strict bail terms — which he said is believed to be the largest federal pretrial bond ever — and house arrest at his parents’ home.

Magistrate Judge Gabriel W. Gorenstein agreed to the bond and house arrest, though he required that an electronic monitoring bracelet be affixed to Bankman-Fried before he left the courthouse Thursday. Roos had recommended it be attached Friday in California.

The bond was to be secured by the equity in his parents’ home and his parents’ signatures and two other financially responsible people with considerable assets, Roos said. The bail was described as a “personal recognizance bond,” meaning the collateral did not need to meet the bail amount.

Reunited with his parents and lawyers inside the courthouse, a silent Bankman-Fried shook the hands of a supporter before heading out the door, where photographers and video crews rushed him until he left in a car.

Though Sam Bankman-Fried’s temporary home in Stanford is no Bahamas penthouse, the neighborhood’s exclusivity makes it a worthy contender.

 

Nick Bax, a Stanford graduate and crypto researcher, stopped to see if he could catch a glimpse of Sam Joseph Bankman-Fried near the home of Joseph Bankman and his wife Barbara Fried in Stanford, Calif., on Thursday, Dec. 22, 2022. Sam Joseph Bankman-Fried, the disgraced former cryptocurrency executive, was granted release from custody on Thursday by a federal magistrate judge who imposed highly restrictive bail conditions including a $250 million bond and a requirement that he remain in home detention with his parents at their home in California. As of 5 p.m. Sam Joseph Bankman-Fried had not arrived to his parents home but security was tight only allowing homeowners access passed the barricades. (Jose Carlos Fajardo/Bay Area News Group) 

Nick Bax, a cryptocurrency researcher and former Stanford graduate who was bicycling to his sister’s home in the neighborhood, said he “was blindsided” by the growing scandal.

“We all drank the Kool-Aid. His marketing plan worked. We thought he was legit,” Bax said. His company, Convex Labs, was able to avoid losing any funds from the FTX episode — but he is worried it will tarnish the reputation of cryptocurrency’s future.

Behind Bax stood the Lou Henry Hoover House, a historic mansion and currently the official home of Stanford University’s president, located just a stone’s throw away from where Bankman-Fried will spend his days.

Property records show the couple moved into the home in 1993. The ownership model of Upper San Juan allows Stanford professors to lease the homes, but the university owns the land beneath it. Many of the homes are over a century old — and recent sale prices show them fetching between $2 and $4 million.

Bankman-Fried was flown to New York late Wednesday from the Bahamas after deciding not to challenge his extradition.

While he was in the air, the U.S. attorney in Manhattan announced that two of Bankman-Fried’s closest business associates had also been charged and on Monday had secretly pleaded guilty.

Carolyn Ellison, 28, the former chief executive of Bankman-Fried’s trading firm, Alameda Research, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

Bankman-Fried is charged with using money, illicitly taken from FTX customers, to enable trades at Alameda, spend lavishly on real estate and make millions of dollars in campaign contributions to U.S. politicians.

FTX, founded in 2019, rode the crypto-investing phenomenon to great heights, quickly becoming one of the world’s largest exchanges for digital currency. Seeking customers beyond the tech world, it hired the comic actor and writer Larry David to appear in a TV ad that ran during the Super Bowl, hyping crypto as the next big thing.

Bankman-Fried’s crypto empire, however, abruptly collapsed in early November when customers pulled deposits en masse amid reports questioning some of its financial arrangements.

The Associated Press contributed reporting to this article.


Source link

WORLD NEWS