Crypto Icon Posts $250 Million Bond; Awaits Fraud Trial
• Sam Bankman-Fried was released from federal court on Thursday after posting a $250 million bond.
• This bond, however, did not require the posting of cash, as typically required, but instead was collateralized.
• Former SEC Enforcement Branch Chief Lisa Bragança discussed the latest legal developments in the case.
Sam Bankman-Fried, founder of the cryptocurrency trading company FTX, walked out of federal court on Thursday as a free man after posting a gargantuan and unprecedented $250 million bond. Reports of the massive bond spread quickly and made headlines around the world. But, as it turns out, there is less than meets the eye in this “$250 million bond.”
In the typical federal case, a bail bondsman will charge 10-15% of the amount in cash to issue a surety bond or “bail bond”. In the case of Bankman-Fried’s astronomical bond, 15% of $250 million would be $37.5 million. But Bankman-Fried did not pay $37.5 million for his bond. In fact, he paid nothing, as there is a second way to acquire a bail bond. A defendant, or someone on their behalf, may pledge collateral in the full amount of the bond. Then, if the defendant fails to appear in court, the pledged collateral is forfeit to the court.
In Bankman-Fried’s case, the collateral was provided by his parents, who are prominent Silicon Valley entrepreneurs. Assistant U.S. Attorney Nicholas Roos described the bond as the “largest ever” pretrial bond, though the amount of the collateral was not disclosed.
After posting the bond, Bankman-Fried was released from jail and is now under house arrest at his parent’s home in Palo Alto, California. He is awaiting a federal trial on multiple charges of fraud. Former SEC Enforcement Branch Chief and Bragança Law Attorney Lisa Bragança discussed the latest legal developments in the case.
The case has drawn attention from around the world, as Bankman-Fried has become something of an icon in the cryptocurrency world. As the trial progresses, the outcome could have major implications for the future of cryptocurrency trading. In the meantime, Bankman-Fried remains under house arrest and awaits his day in court.