It turns out that Sam Bankman-Fried was not directly responsible for his nine-figure bond, which was posted on Thursday.
The agreement to finance the $250 million bail, known as a personal recognizance bond, is anticipated to be secured against Bankman-Fried’s house in Palo Alto, California, where the disgraced FTX founder has been ordered to reside until his trial. Both of his parents are professors at Stanford University, which is close.
Seth Taube, a former federal prosecutor and SEC official, told Blockworks that Bankman-Fried’s headquarters firm in the Bahamas while he resided there is likely a significant factor in the high bail amount.
“He did not return willingly when the investigation began, but he did submit to extradition,” Taube added. “I believe that had he surrendered and returned when he learned of the inquiry, it would have altered the outcome. He elected to stay in the Bahamas in order to be extradited.”
A personal recognizance bond is a written promise to appear in court at the time and date designated by the judge. According to court documents, Bankman-Fried, his parents, and one non-family member must sign the bail conditions. The identity of the second person has not yet been revealed.
The disclosure of the third party is due on January 5, and the security interest secured by the equity in his parents’ home is due on January 12.
Ira Lee Sorkin, Bernie Madoff’s attorney, told Blockworks that the entire sum is a bit of a red herring.
The bail of Michael Milken, a Drexel Burnham Lambert executive charged with racketeering and securities fraud in 1989, was similarly set at $250 million, which, when adjusted for inflation, is equivalent to around $570 million today. The following year, he admitted guilt to six charges of felony and was sentenced to $600 million in penalties and 10 years in jail.
The New York Times reported at the time that assistant US attorney John K. Carroll sought Federal District Judge Kimba M. Wood to set Milken’s bail at $250 million, to be secured by the $700 million put aside for the racketeering offences. Milken got more than $1 billion from Drexel over the course of the previous five years, and the government included those revenues in its calculation.
During his confinement at his parent’s residence, Bankman-Fried must get court permission before participating in any transactions over $1,000, excluding legal expenses.
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