Bankman-Fried's Shrinking ‘$250M Bond’

I think this article is "directionally correct", but wrong (or at least misleading) about some key details.

> Instead, Bankman-Fried’s parents promised to pledge their Palo Alto, California, home as collateral. The Palo Alto home is rumored to be worth $4 million. And that is the full extent of the collateral pledged to guarantee the $250 million bond. No other collateral was posted or promised.

The first couple sentences are true: his parents have agreed to convey title to their ~$4M Palo Alto house to the court as partial guarantee of the $250M bond. But I think the last sentence is contradicted by the actual bond agreement:

"2 non-parent sureties to sign bonds in lesser amounts to be agreed to"

This is in all-caps at the middle of page 5 of https://storage.courtlistener.com/recap/gov.uscourts.nysd.59.... Which is to say, at least according to the published agreement, it is not true that "no other collateral was posted or agreed to".

> Yes, you read that right. Bankman-Fried walked out of court a free man by signing a piece of paper where he promised to pay the court $250 million if he decides to flee to another country with no extradition.

It is true that this is all that Sam did, but it intentionally fails to mention that 3 (or perhaps four?) additional people have also signed up for the same agreement to be responsible for the gigantic (potentially non-collectible?) amount should Sam disappear. Presumably the hope is that they are able to apply social pressure to keep him from disappearing.

Given that much of the failure of FTX related to overvaluing of collateral, the irony is definitely strong. But I think we should still try to be accurate when pointing out the apparent absurdities. Further corrections of course appreciated if I'm wrong about these corrections.

Edit: dragonwriter points out below that the "2 non-parent sureties" are likely just additional signed surety bonds, and thus the article is probably correct the "no other collateral was posted or agreed to".

Seems like there's a group of people who want him to be obliterated and will be dissatisfied at every step if it isn't mounting his head on a pike. It's honestly one of the more disturbing parts of the story for me.

For anyone who is not aware, in the US you sometimes have to put up bail money to get out of jail because you are a flight risk or there is a danger you will commit further crimes (assuming you are guilty which is at that point unproven). There are services that do this as a bond, called a bail bond.

You typically don't put up the full amount, maybe 5-10%. The rest of the risk of you not showing up for your trial is assumed by the bail-bondsman or some other intermediary. Since people usually show up it is a good business.

As an aside, the problem with this system-- like a lot of the US justice system-- is that it favors people with wealth.

What a weird argument you're making,

>2 non-parent sureties to sign bonds in lesser amounts to be agreed to

I'll be extremely generous and interpret that as two bonds worth 3.99...M each or the absolute max. value that is less than the 4M house.

Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets? Also, they happen to be the parents of one of the biggest fraudsters in recent years ...

Come on, this is ridiculous.

Agreed, I'd like to see SBF prosecuted as much as anyone else, but I want it to be a legal trial. His statements should be accepted in the most generous possible light, and the case against him should be ironclad enough to hold. (Otherwise there isn't much point to the justice system existing at large).