(Clearing lump from throat)
Man! I have a 17 YO and he's done this to me a couple of times. Not 3am, or he wouldn't still be here. Anyway, he doesn't really take to grounding cause it doesn't bother him. You have to find out what matters to him most - just like any kid at any age - in order to know what is "punishment" for him.
I love DrewDads suggestion about writing it out. When he gives you a suggested punishment, just remember to double it.
I swear I've aged more in the past 3 years from my teenagers than I'll ever age again. I totally agree with your approach of giving him some space, emphasizing good decisions, and allowing yourself to trust him until proven otherwise. That's one of the hardest things to do.
So glad he's alright... at least until Mumpad gets him.