FTX founder Sam Bankman-Fried to be released on $250M bail • Hacker News Board

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#461

Post by [deleted] » Fri, Dec 23, 2022, 5:21 AM UTC

berberous wrote: post #291

hn_throwaway_99 wrote: post #252

Earlier quoted context omitted.

Normally when you post bail you have 2 options: 1. Pledge the full amount of the bail yourself. You get this back if the accused shows up in court, you lose it of they flee. 2. Pay some percentage (usually X%) to a bail bondsman. You never get that money back, and if the accused flees, the bail bondsman will try to get the money from whomever signed the bond (as the bail bondsman is on the hook). The bail bondsman ma…

I think bail norms probably vary by jurisdiction, etc., and your assumptions are not correct. My guess is he was not required to post full collateral, i.e. the only collateral here is the home, and then Sam, his parents, and two others posted essentially an unsecured guarantee for the full $250M, such that the government could recover up that amount from any assets held by any of those parties. While unsecured, note…

[deleted]

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#462

Post by joejerryronnie » Fri, Dec 23, 2022, 5:26 AM UTC

hn_throwaway_99 wrote: post #384

throwawaylinux wrote: post #370

Earlier quoted context omitted.

Do you not understand the concept of a secured promise or bond? These things have been around long before crypto, before money was funny, and possibly before money at all. The entire finance, banking, and trading and contract systems of the modern world are built around this. The reason FTX was a scam is not because they weren't sending gold bars to investors.

I think the issue, though, is that nobody put up anywhere near $250 million to secure the bond (at least from my read of it). This is one of the rare instances where general population outrage at this deal (read the NYTimes comments) is warranted. There are tons of poor folks who sit around wasting in jail, waiting for their trial, because they can't make bail. But this appears to be the case where the bail is "nomin…

You are correct. The parent’s home plus some assets of two other individuals probably totaling a max of $5 million but nowhere close to $250 million - which was a stupid amount to set in the first place. Either require a reasonable bond amount or deny bail.

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#463

Post by andsoitis » Fri, Dec 23, 2022, 5:29 AM UTC

vkou wrote: post #345

jrockway wrote: post #270

Earlier quoted context omitted.

Your solution to needless suffering is to add more needless suffering?

If we only permitted accused criminals to have public defendants, instead of being able to hire expensive lawyers, I expect that improving the public defense system would magically become a priority for everyone, or at least, for half of the legal profession. If we got rid of TSA-precheck, I would expect some of the bullshit that regular travelers have to go through would be eliminated. It's pretty easy for people wi…

> If we got rid of TSA-precheck, I would expect some of the bullshit that regular travelers have to go through would be eliminated. It's pretty easy for people with power and influence to not give a shit about what the rest of us have to deal with, when they never need to experience it.

I must admit: if TSA pre-check is an example of what people with power & influence get away with, then I can simply not be convinced of your case.

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#464

Post by joejerryronnie » Fri, Dec 23, 2022, 5:38 AM UTC

vkou wrote: post #345

jrockway wrote: post #270

Earlier quoted context omitted.

Your solution to needless suffering is to add more needless suffering?

If we only permitted accused criminals to have public defendants, instead of being able to hire expensive lawyers, I expect that improving the public defense system would magically become a priority for everyone, or at least, for half of the legal profession. If we got rid of TSA-precheck, I would expect some of the bullshit that regular travelers have to go through would be eliminated. It's pretty easy for people wi…

As a TSA-precheck member, I’ve never felt like part of the ruling class until today. Bow before me and tremble!

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#465

Post by bogomipz » Fri, Dec 23, 2022, 5:39 AM UTC

hn_throwaway_99 wrote: post #252

happyopossum wrote: post #205

Earlier quoted context omitted.

> secured only on his parents’ home in Palo Alto, This part is incorrect - his parents and 2 other individuals with ‘significant assets’ signed on his bond.

Normally when you post bail you have 2 options: 1. Pledge the full amount of the bail yourself. You get this back if the accused shows up in court, you lose it of they flee. 2. Pay some percentage (usually X%) to a bail bondsman. You never get that money back, and if the accused flees, the bail bondsman will try to get the money from whomever signed the bond (as the bail bondsman is on the hook). The bail bondsman ma…

It didn't come from anywhere.

From Bloomber:

>"FTX co-founder Sam Bankman-Fried’s $250 million bail package is one of the largest in US history, but it doesn’t mean he actually has to put up that kind of money. At Bankman-Fried’s bail hearing on Thursday in federal court in Manhattan, both the prosecution and defense agreed that the former billionaire’s assets have “diminished significantly.” Bankman-Fried has said he may have only $100,000."[1]

>"The $250 million personal recognizance bond approved by the judge was secured by the equity in Bankman-Fried’s parents home in Palo Alto, California, which is almost certainly not worth anywhere near that amount. But outsized bonds are more a means of establishing harsh financial consequences for bail-jumping and are often backed by assets worth only around 10% of the stated amount."[1]

Further:

>"In addition to Bankman-Fried and his parents, the bond must be signed by two other people of “considerable means,” one of whom can’t be a relative, by Jan. 5"[1]

So it sounds like he able to leave today with nothing more than the equity in his parents house pledged and now has until the 5th of the new year to find the other non-family signatory as well as the rest of the funding. I've read in multiple sources that his parents house appraised somewhat recently at $4 million, so that max equity they could have would be that. So if they are required to put down 10% that still means they need to find another 21 million dollars somewhere.

[1] https://archive.vn/QeZy7#selection-4563.0-4563.157

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#466

Post by vostok » Fri, Dec 23, 2022, 5:39 AM UTC

moralestapia wrote: post #352

Consultant32452 wrote: post #309

Earlier quoted context omitted.

Cash bail means the accused pays the full bail amount and then gets it refunded after trial. A surety bond is basically a loan, through a bail bondsman. The bail bondsman has insurance in case you don't show up. A property bond is where the court gets a lien on your property. It sounds like this is what happened. https://money.howstuffworks.com/bail.htm

If that's the case, I'm very curious now about how two Stanford professors have at least 250M of property under their name. Perhaps it has been acquired in the past 4 or so years? (Nothing against Stanford or professors, but academia pay peanuts and professors are usually very far from having a net worth of 9-10 figures, faaaaaaaar awaaaaaay)

This isn't super relevant, but academia in the US pays very well. This is even more so the case for law, business, engineering, medicine, and a few other areas.

Obviously not relevant in the context of $250 million.

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#467

Post by bogomipz » Fri, Dec 23, 2022, 5:47 AM UTC

throwthere wrote: post #157

Armchair thoughts-- makes you wonder what the game is here-- the prosecutors want a high enough bail that SBF can make, but not so high that he wouldn't pay the bond. For reasons-- 1) It proves he has more funds. 99% odds he will declare bankruptcy once the civil judgements come, so this refutes SBF claims that he only has a few hundred dollars in a bank account somewhere. 2) Making him collect funds from more than o…

>"Armchair thoughts-- makes you wonder what the game is here-- the prosecutors want a high enough bail that SBF can make, but not so high that he wouldn't pay the bond."

What would the prosecutors cared if he made bail? What is their interest there?

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#468

Post by dragonwriter » Fri, Dec 23, 2022, 5:50 AM UTC

bogomipz wrote: post #465

hn_throwaway_99 wrote: post #252

Earlier quoted context omitted.

Normally when you post bail you have 2 options: 1. Pledge the full amount of the bail yourself. You get this back if the accused shows up in court, you lose it of they flee. 2. Pay some percentage (usually X%) to a bail bondsman. You never get that money back, and if the accused flees, the bail bondsman will try to get the money from whomever signed the bond (as the bail bondsman is on the hook). The bail bondsman ma…

It didn't come from anywhere. From Bloomber: >"FTX co-founder Sam Bankman-Fried’s $250 million bail package is one of the largest in US history, but it doesn’t mean he actually has to put up that kind of money. At Bankman-Fried’s bail hearing on Thursday in federal court in Manhattan, both the prosecution and defense agreed that the former billionaire’s assets have “diminished significantly.” Bankman-Fried has said h…

> So if they are required to put down 10%

They aren't. The parents as surety for the full amount, the security claim on the home, and the two additional sureties for a smaller amount TBD are the approved requirements for the bond.

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#469

Post by dragonwriter » Fri, Dec 23, 2022, 5:52 AM UTC

bogomipz wrote: post #467

throwthere wrote: post #157

Armchair thoughts-- makes you wonder what the game is here-- the prosecutors want a high enough bail that SBF can make, but not so high that he wouldn't pay the bond. For reasons-- 1) It proves he has more funds. 99% odds he will declare bankruptcy once the civil judgements come, so this refutes SBF claims that he only has a few hundred dollars in a bank account somewhere. 2) Making him collect funds from more than o…

>"Armchair thoughts-- makes you wonder what the game is here-- the prosecutors want a high enough bail that SBF can make, but not so high that he wouldn't pay the bond." What would the prosecutors cared if he made bail? What is their interest there?

I think the upthread theory was based on a mistaken assumption about how bail works, wherein SBF would have to reveal hidden assets to make bail if it was large enough.

Re: FTX founder Sam Bankman-Fried to be released on $250M bail

#470

Post by bogomipz » Fri, Dec 23, 2022, 5:55 AM UTC

randyrand wrote: post #133

WJW wrote: post #121

Earlier quoted context omitted.

His parents' house is worth 250 million USD? (!?!)

emphasis collateral. A loan was taken out for 250M with 4M collateral.

Do you know this for a fact? I'm having trouble believing a bank would agree to loan the parents $250 million with only a 4 million dollar house as collateral. Even if the parents equity was 100% of the appraised value that's only $4 million. What ability do they have to pay the rest back? They're not paying that back on Stanford faculty salaries. Further the parents themselves might very well be implicated in this whole mess. I'm trying to imagine a loan office who would be willing to green light such a loan given all the above.