Controversies have arisen over a US court’s decision that bailed out Sam Bankman-Fried on one of the largest bail bonds in US history!
Following the extradition agreement, FTX’s founder Sam Bankman-Fried landed in the United States on Dec. 21 and was present before the New York judges.
Despite what people expected, the court hearing ended up with a bail order and Sam Bankman-Fried only spoke once.
Back in the USA!
Lower Manhattan court judges decided that Bankman-Fried would be released from custody on a $250 million bond while awaiting his trial.
The accused was also required to obey certain conditions during this specific period. He has to wear an electronic bracelet and another means of electronic monitoring.
SBF isn’t allowed either to leave his parents’ house or make transactions over $1,000.
The US will serve an arrest warrant on him and confiscate the bond if he fails to comply with those conditions, as stressed by Gabriel Gorenstein, Magistrate Judge of the Southern District of New York.
He added that electronic tracking devices would ensure close monitoring of Sam Bankman-Fried.
The former billionaire previously stated that he only had $100,000 left, and at the same time, his account was frozen under legal enforcement. So where were the bail funds from? His parents.
Broke @$$ SBF
According to The New York Times report, his parents likely posted using the equity in their home. Bankman-Fried’s parents reportedly signed a bond agreement and pledged properties in Palo Alto, California.
The court’s decision has since stirred up controversies among the crypto community members. Criticism and derision have spread on Twitter as well as other popular social platforms.
A bail grant is normal during legal proceedings, however, people argue that the bail decision this time is unfair. During the hearing, the judges themselves described the bail as huge.
One of the judges indicated that this is probably the largest personal surety of all time.
Critics said that Sam Bankman-Fried was ineligible for bail considering a series of charges that he is currently facing. People also question the source of the money, doubting that it might come from customers’ funds.
Another concern is the payment ability of Sam Bankman-Fried’s parents since $250 million is not a minimal sum and potentially leads them to trouble.
“Sam is out on a personal recognizance bail. What this means is that NO MONEY has been paid. His parents put up their home as collateral, one relative and a non-relative have also put up collateral. All of them would be on the hook for $250M if Sam runs,” Autism Capital noted.
No Honor Among Thieves
Before FTX’s former CEO was released, his close confidant and co-worker Caroline Ellison (former CEO of Alameda Research) and Gary Wang (former CTO of FTX) had admitted wrongdoing on all four counts of fraud and conspiracy, facing up to 50 years in prison.
They are now cooperating with prosecutors to move the case forward.
Wang’s attorney, Ilan Graff, stated that his client recognizes his culpability and takes his responsibilities as a cooperating witness seriously. They entered plea bargains.
If they follow through on these agreements, their sentence should be reduced. Ellison and Wang were both released on bail of $250,000 each.
Ellison and Wang were also found guilty of fraud by the Securities and Exchange Commission (SEC). The US regulator accuses them of aiding in the transfer of assets from FTX clients to the hedge fund by misleading investors.
The SEC also accuses Ellison of price manipulation of FTT while acting under the direction of Bankman-Fried. Managers then used the FTT to deceive investors about their companies’ health.
According to the New York Southern District Attorney’s Office indictment, both Ms. Caroline Ellison and Mr. Gary Wang were aware of FTX – Alameda’s wrongdoings in the misappropriation of users’ monies for a long period.
As a result, FTX seized users’ money and transferred it to Alameda Research without their knowledge. When FTX announced liquidity issues in early November, the entire fraud operation fell in a matter of days.