FTX founder Sam Bankman-Fried posted bail Thursday that would see him released on a $250 million bond secured against his parents’ estate with restrictions on his movement.
Here is an explanation of what his business looks like and how the bond works:
Was Bankman-Fried expected to get bail?
Defendants are presumed eligible for bail unless prosecutors can prove no conditions would ensure they would return to court. Because Bankman-Fried was charged with white-collar, or financial, crimes, it would have been surprising if he was not granted bail.
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How did Bankman-Fried secure the bail?
Defendants secure bail by putting up enough of their own assets to cover a portion of their bond.
These so-called bond packages are mixtures of assets that may include cash, real estate or anything else of value. They are often co-signed by family members who would be on the hook if a defendant flees.
Official defendants often have the option of setting up bond packages, but defendants with limited assets often use a surety.
Bankman-Fried’s bail was secured by his parents Joseph Bankman and Barbara Fried, who offered their home in Palo Alto, California.
Does the bail amount mean Bankman-Fried or his family have $250 million?
No. In Bankman-Fried’s case, the $250 million bond is secured by his parents’ home. Because Bankman-Fried’s parents signed the bond, they would be on the hook for $250 million if their son absconded.
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“They can take anything else,” said Michael Bachner, a New York criminal defense attorney. “They can go ahead and take bank accounts, IRA accounts, stock accounts.”
The $250 million bond does not reflect the family’s assets, which could not be determined. Bankman-Fried said in late November that he now had “almost nothing” left and is down to one working credit card with “maybe $100,000 in that bank account.”
Is this the biggest bail in civil service history?
It sure is big. New York federal prosecutors have described Bankman-Fried’s alleged crimes and the collapse of his $32 billion crypto empire as one of the largest financial frauds in US history. His bond package far exceeds some of the most infamous cases in that history.
“It’s the biggest bond I’ve ever heard of in my history of making bonds,” said Ira Judelson, a prominent New York surety who specializes in high-profile defendants.
Elizabeth Holmes, the founder of blood-testing startup Theranos, who was convicted of defrauding investors in January, was released after she was arrested in 2018 on a $500,000 bond after surrendering her passport.
The late financier Bernard Madoff, whose $65 billion Ponzi scheme was the largest in history, was released in 2008 on $10 million bond after surrendering his passport and agreeing to strict monitoring conditions and a curfew.
Will Bankman-Fried travel abroad?
Defendants are usually required to surrender their passports and wear monitoring devices.
Prosecutor Nicolas Roos told U.S. Magistrate Judge Gabriel Gorenstein that the bail package would require Bankman-Fried to surrender her passport and remain at home at her parents’ home in Palo Alto. He would also have to undergo regular mental health care and evaluation.
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How long can Bankman-Fried be out on bail?
Awhile. A trial in New York is likely more than a year away, as prosecutors build their case and both sides spar over evidence.