By Michael Scott
Yesterday, a New York judge released Former FTX boss Sam Bankman-Fried under a $250 million bond agreement. This event led to Crypto Twitter asking about how Bankman-Fried would pay the amount, considering he has already lost billions of dollars.
However, the answer is that nobody had to pay any amount for his release because the release agreement is an appearance bond. That means Bankman-Fried promised to comply with some specific restrictions as he awaits trial and to appear before the court when that time comes.
The appearance bond establishes a personal recognizance bond guaranteed by at least four individuals. In addition, one of the guarantees must not be a member of the defendant’s family. In the Bankman-Fried case, at the moment, there are only two signatures, one is of his father, Allan Joseph Bankman, and another of his mother, Barbara Fried.
What’s a Recognizance Bond?
U.S. laws describe Recognizance as a release that does not require an upfront payment. Instead, it primarily bases on a defendant’s written promise to appear before the court when they are required to do so.
According to Mirian Baer, a law professor at Brooklyn Law School, when a family member co-signs a recognizance bond, the defendant’s failure to appear in court affects other co-signers. The professor adds that family members co-signing a Recognizance bond which involves significant dollar amounts, is a powerful way to make the wealthy individual return to the court.
SBF Puts Parents’ Property at Risk Failure to Agreement Compliance
Additionally, the bond document has outlined several requirements, including business activities, spending, and house arrest restrictions. If Bankman-Fried fails to comply, then the $250,000 becomes payable. The property offered as collateral is his parents’ Palo Alto home. The court document, however, does not include the value of the property or its address.
Bankman-Fried is facing eight charges, including his alleged fraud in using FTX users’ money to place bets through his trading firm Alameda Research, conspiracy to defraud the U.S., and alleged violation of the campaign finance policies.
The former billionaire got famous for funding Democratic politicians’ campaigns, although he later revealed that he also donated to republicans. Some politicians who received the donations have opted to return the money to FTX, and others contributed to charity.