‘He was released on bail for a $250 million bond — “the largest ever pretrial bond,” apparently — secured only on his parents’ home in Palo Alto, where he will be living.
’SBF will surrender his passport and remain in home confinement with electronic monitoring — he’ll wear a bracelet. He will also be required to undergo regular mental health evaluation and treatment. No financial transactions over $1,000 except legal fees, no new lines of credit, and he can’t start a business. Also, no firearms.
’That is: Sam lost all his money in crypto, and has moved back into his parents’ basement.’
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 may also engage a bounty hunter to try to catch the accused.
Obviously, with a bail amount this large, my guess is there is no bail bondsman that has that much to put up. So there should be $250 million that someone pledged for this bail. I'm still confused as to where that amount came from.
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 that the government probably has priority over any creditors and could and would seize any assets of those parties per the guarantee.
They require it is legal tender so guarantee it has value as a medium for exchange and storage.
I didn't say the government guarantees a particular value. I said it is backed by a government guarantee, and that is what ensures it has value (i.e., it is worth what is written).
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 "nominally" $250 million, but nobody had to guarantee that with reasonably equivalent collateral. I could be misunderstanding what collateral was put up, but the only thing that was mentioned was his parents house (which even in Palo Alto isn't $250 million).
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.
I never claimed that rich and poor were equal under the justice system, just that the court seems to consider the loan (edit: bond) to be secured. It sounded like there was more on the line than just the house, didn't it?
FTX said: "Don't worry we have collateral ... lol jk!"
SBF's parents said: "Don't worry we have collateral ... lol jk!(?)"
Your bit about "but fiat isn't real either" is true to some extent, and you could even go deeper and argue that nothing is real because we don't know if the universe is real or whatever. But honestly, in a practical context, there's a huge difference between:
I have 100 million in the bank; source: bank statement.
and
I think I have 100 million in the bank; source: trust me.
You're claiming the court accepted the collateral from the parents and these two other allegedly wealthy "individuals" without doing anything to verify it?
If that is what happened then you are right about it being funny money, and hilarious that they duped the court like they did their investors.
The simplest explanation is usually true. A billionaire enabler of Sam's was willing to put up $250M in collateral because Sam spilling on him would cost him far more that $250M. I think the claim he was acting alone solely on his own behalf is absolute garbage. He rose too high, and too rapidly to have been solely of his own creation. Someone bigger than him was absolutely involved.
I think we need to look further into FTX's Tokenized Stock Offerings, as that's what the SEC has been honing in upon, among other things.
FTX was selling stock, claiming it to be backed 1:1, which was likely being used as collateral for further speculation, or as locates for short sales, despite never actually holding the shares they claimed to.
Crypto is unregulated and is a whole thing, but claiming to have stocks you don't have is a way to really piss off the ultra-rich.
> A billionaire enabler of Sam's was willing to put up $250M in collateral
No one put up collateral beyond his parents home, and only SBF and his parents are on the hookfor the full $250M, the other two sureties are exposed for a smaller amount.
> The simplest explanation is usually true. A billionaire enabler of Sam's was willing to put up $250M in collateral because Sam spilling on him would cost him far more that $250M.
But whether SBF is out on bail doesn't affect what comes out at trial. If you're saying that SBF is effectively extorting those other individuals, on threat of revealing their secrets, then their pretty dumb extortion victims, since nothing stops SBF from continuing to demand massive investments of their money such as this one.
SBF has been charged with the following crimes in a U.S. federal court.
Conspiracy to commit wire fraud on customers
Wire fraud on customers
Conspiracy to commit wire fraud on lenders
Wire fraud on lenders
Conspiracy to commit commodities fraud
Conspiracy to commit securities fraud
Conspiracy to commit money laundering
Conspiracy to defraud the United States and violate the campaign finance law.
With the limited information we currently have, to assume that he is the biggest player in this and that him, Ellison, and Wang were the only ones involved is naive at best. The discovery process for these cases will be extremely interesting.
> 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
Approximately this, though only SBF and his parents are on the hook for the full amount, the other two for a lesser amount (TBD in the main bail doc.)
Sam probably has access to a ton of FTT. He can open a trading desk in his parent's basement and recover at least a few hundred USD. He's very bad at gambling, but if he can find a new shitcoin to arbitrage, he can leverage his FTT to new heights and be back at the top! It will be from prison, however.
He probably has access to the several hundred million dollars worth of crypto stolen from FTX wallets around the time of the collapse, but he also probably doesn’t want to show that he does.
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)
Law professors make much better money than most academics, with starting salaries more than double what humanities professors make. These are also senior professors who have been at Stanford for a long time, making good money and presumably investing along the way. SBF's dad is a famous tax law professor (he 'wrote the book' on federal income taxation that's used at law schools all over the country), so he understands finance/investing better than most academics.
I would guess that their net worth was north of $10M just based on those earnings, subsequent investment, and their house (which is apparently worth $3M+).
Of course, SBF has had some incredible arbitrage wins over the years, and he presumably offered his parents the opportunity to run a million or two through his money making machine. If they were more conservative with their gains that he was, they could easily have $20 or $50 million. I agree it's unlikely that they have 10 figures, though.
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.
I doubt there will be a trial, as too many politicians could be deposed along with tracing washed funds from US to Ukraine to FTX. He will have an unexpected medical complication or will take a plea deal.
Without a trial and witnesses testifying, most shenanigans will remain unknown. This is why the odds favor he takes a plea or has an unexpected medical issue.
>"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.
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.
If the prosecution had any qualms about those posting bail on SBF's behalf, they could ask for a surety hearing in order to ascertain where the funds are actually coming from, and that they're legit.
Note: Even though the Federal Bail Reform Act of 1984 allows Federal courts to require financial conditions such as a cash or property bond, the majority of districts no longer use bail bonds, and very few bondsmen will work with federal cases.
> This part is incorrect - his parents and 2 other individuals with ‘significant assets’ signed on his bond.
Yes, they stand surety, but only the home secures the bond. (That is, the court has—or will have, their is time to post it—a recorded legal property interest in the home until the bail is no longer needed.)
Well, known by who? More of them are known to journalists and Google than to a proverbial person on the street, but there are supposed to be over 3,000 billionaires in the world.
We probably haven't heard of most of the 99% of billionaires that aren't in the top ten. And if we haven't heard of them, it would not make a lot of sense to be certain that "it is known" of all of them where they got their wealth.
Last year, if you didn't Google them, did you know who Bernard Arnault, Mukesh Ambani, or Gautam Adani were? In the case of Adani, I had never heard even of his company, which apparently is one of the largest in the world.
(The point of this post was mainly to use the phrase "99% of billionaires")
His parents' home isn't worth anything like that. Does that mean only a fraction of the bond value needs to be the security? If so, is that not bullshit?
Normally, the accused pays a bail bondsman ~10% of the bail amount and bondsman puts up the full amount at the courthouse. The 10% is a fee to the bondsman, the accused doesn’t get it back. The bondsman gets back their full amount back when the accused shows up for trial. If the accused flees, the bondsman sends bounty hunters and/or calls in their insurance policy.
Not sure how it works for amounts this large, but the above applies to your everyday DUI/assault/etc (at least here in VA). And even if the house was worth $25 million, they would essentially be giving it to the bondsman, which I doubt it what happened.
The rich truly do play by different rules, even when they’re charged with crimes.
thanks. who pays if he and the parents skip the US to somewhere from which they're not retrievable, and their house sells for a very presumptive 4 million?
SBF and his parents are on the hook for the full amount, two other sureties for lesser amounts.
Personally fleeing doesn't really matter, because signing as a bail surety makes the court itself your agent for service of process, and default judgement is automatically available. (They do have to provide a copy of notices at the sureties last known address, but they don't have to actually serve notice on them.)
Now, if all the assets of SBF and his sureties are out of reach of the US government, that would be a problem.
With that level of living, he must have always had a few millions lying around, I wonder how it’s possible to come back to limit expenses to two or three thousand dollars a month, like the rest of us.
I realize that it's easy to reach the forgone conclusion that yes, he's guilty and a criminal. You'd have to really tie yourself into knots to find out how he could be innocent. But our legal system still treats people not yet convicted as....not yet convicted.
Speaking more generically, people released on bond need to be able to have the resources necessary to form a proper defense, and also to try and avoid their entire life being destroyed by an arrest that may or may not lead to a conviction.
Normally, I agree. However, considering the statements from current CEO John J. Ray III and two guilty pleas from insiders, it is hard to believe he is innocent. In the digital era, wire fraud is so simple to prove and can carry huge jail sentences. Honestly, I wonder if he will also plead guilty. The evidence against him looks enormous. Even with a guilty plea, I expect 10-20 years jail sentence and all assets seized.
What would this achieve? I think SBF has done a load of financial crime, but I don’t think we are at risk of him spinning up a new token and making millions. Internet is required for a lot of normal shit, making it illegal is a really cruel punitive thing
I don’t know about cruel, he’s just preparing for a significant legal defense. Communications, researching, etc using the internet is an important part of defending himself in court which he deserves a fair shot at. The purpose of the bail is to enable him to better participate in the upcoming legal proceedings.
I'm all for getting to the bottom of what SBF did, but he hasn't been convicted of any crime yet. It's important that we go through the process before applying punishments.
I think if his suggested crime involved use of the internet, there's a case for withholding internet from him. Hard to supervise that at a family home, however.
Cruel might be a bit of a stretch. He can read and do some sketching. Bit of home maintenance. Have a crafternoon or two.
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 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.
> 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.
That has not been proven. He hasn’t had a trial yet. Maybe you are unfamiliar with the US justice system, but at least in principle the idea is to only punish after someone has been found guilty.
Not really, my thought is any kind of bail jumping or favor calling in, or attempts at covering up evidence would be done on the internet. It's to preserve the effectiveness of the trial, not just some arbitrary punishment.
> on bail for a $250 million bond — secured only on his parents’ home in Palo Alto
Wait what? How does that work? I thought if the bond was $X, that literally means you either (a) give the court $X, cash only or (b) sit in jail until trial.
How can his bond be set at $250 million, yet the court somehow isn't just making him sit in jail until and unless he either goes to trial and is found not guilty, or he coughs up $250 million?
A financial intermediary trusted by the court pledges to pay the court the 250M if SBF flees and the intermediary cannot find him and take him back into custody.
For typical bail amounts i.e., $50k, the intermediary usually demands 10% of the $50k from the defendant (and his friends) as a deposit, but maybe SBF found an intermediary willing to make the pledge to the court for a deposit significantly less than 10% of the 250M.
Okay so it's basically a bail bond, sign over the $2M house to get the bondsman to post $250M bond.
What bondsman has $250M? Even if they did, why would they ever agree to this?
Isn't getting $2M from a defendant on a bail bond less than even the interest you could probably get by just putting your $250M in, say, a Treasury bond over the same timeframe?
For that matter, who's willing to bet $250M at 99-to-1 payout odds that a smart guy like SBF won't be able to disappear and pop up in Dubai or somewhere with no extradition to the US? (Remember SBF probably had the means, motive, opportunity and moral character to siphon a couple hundred million worth of BTC into a wallet there are no records of. And he knew for a long time FTX was going to collapse and he was probably being investigated.)
> sign over the $2M house to get the bondsman to post $250M bond.
No, there is no bondsman, the house is pledged directly to the court as security, his parents are additional surety for the $250M, and two other people are signing lesser bonds.
How exactly are his parents able to provide a surety for $250M? Do they have assets worth that much? If not, what's even the point of setting bail at $250M, if you only need to put up $4M in collateral?
Why does he get to do this, while someone with a $50,000 bail has to either put up the entire cash amount, or pay 10% in interest to a bondsman?
The court must be convinced that the parties involved are good for it or they would not have accepted the surety. The point of bail is just to ensure you show up to court, not to collect a windfall of profit for the state.
So what happens if SBF disappears? Do the parents lose their $2M house? Lose their $2M house and become $248M in debt? Go to jail?
What keeps the whole family from simply going on a sudden vacation to Dubai and letting the court take their house? Losing one's childhood home is sad, but stolen Bitcoins can still buy a very nice replacement.
His parents are reported to have a $16M Bahamas property in their names, so they can just go to the other houses they bought with funds from their college professor salaries.
People say this kind of thing all the time but I'm yet to see an internet scammer get their comeuppance. That includes people who have been identified after running exit scamming darknet markets. My guess would be that when it comes to online fraud, people are more willing to swallow it because it doesn't seem so real.
Any one of those I guess. I'm not going to make that call, Interpol has a warrant out and nothing happened as a result of that so if she's hiding she's very good at it (which may well include plastic surgery) and if she's dead she did in fact get her comeuppance and then some.
> maybe SBF found an intermediary who'd take significently less than 10% of the 250M.
The amount is large enough that even with 1% or 0.1% they could probably pay a professional bounty hunter to tail him for a week, reducing the odds of him escaping.
> I thought if the bond was $X, that literally means you either (a) give the court $X, cash only or (b) sit in jail until trial.
The simple answer is that you are wrong, that's not how bail and bail bonds work, and its much more complicated than that. Essentially, money bail is a pre-declared failure to appear penalty, and bond is whatever the court accepts as a sufficient promise to pay, which can include purchasing a contract from an official bail agent, having other individuals agree to be on the hook for payment, providing somr property to the court, either physically or a legal claim that allows them to seize it for nonpayment, or a combination of these.
Consider Joe Average defendant whose bail is set at $25,000 bail. If Joe tells the judge "Your Honor, I'll sign a paper that says I'll be $25,000 in debt if I don't show up, but my family can only come up with $200 right now" the judge will probably tell him to pound sand and sit in jail until trial.
If SBF tells the judge "Your Honor, I'll sign a paper that says I'll be $250M in debt if I don't show up, but my family can only come up with $2M right now" why did the judge agree and let him out?
What's the fundamental difference, besides just the number of zeros?
You missed the part where the defendant's lawyers provide the court the necessary evidence to convince the court that the total value of the bond is available to be confiscated if the defendant doesn't show. Which would apply in both cases you mentioned.
> Do his backers get the bond money back if he does show up and the process runs without any hiccups?
There is no “bond money”. The $250M he and his parent signed for, including the lesser amount the other sureties are also on the hook for, doesn’t get collected by the court unless their is a failure to appear. The security interest in the home is the only thing actually transferred.
Wouldn't it be interesting if the people who secured the other part of his bail bond are all rich individuals holding all of their net worth in crypto?
If you search "palo alto basement remodel" you'll find a heck of a lot of contractor / services pages (enough to frustrate me looking for actual news coverage or mentions).
And a Crescent Park remodel involving basements across four properties:
They do if you spend enough money. I met someone who was related to an executive of Intel and they had a basement with dumb waiter and a laundry chute from the other floors.
There's practically no basements in residences in lots of Texas. In Houston a lot of the city is literally only 10-15ft above sea level, the water line is often close to the surface. Coupled with lots of rain and flooding, it's not a good idea. Then in North Texas, expansive soils are then a challenge. There's lots of shifts from drought to wet seasons that'll quickly start crushing those walls.
It's definitely possible to have basements, but it's something only the exceptionally wealthy would even bother with.
I’ve seen some in older homes and have heard “there are no basements in Texas” when I lived there. Same thing in Oklahoma, even though a house I lived in as child had one and we definitely weren’t wealthy. :)
Basements or crawl spaces? Older homes were often pier and beam construction which would have a crawl space. But most houses aren't pier and beam these days they've been pretty much all slab style since at least the 50s.
There's tons of basements in Oklahoma, you're starting to get out of the expansive soil areas I was talking about at that point. You're then also needing to worry about the frost line so your foundations would need to be deeper anyways.
I mean, don't get me wrong, you can build a basement anywhere. Its not like the ground is truly impermeable. Its really just a question of if its worth the maintenance or not depending on the terrain around. If you're going to have your sump pump constantly run because your basement is below the water line, you're going to have a bad time. If you've got expansive soils that'll constantly be changing the direction of load on your basement walls, you're going to have a bad time. Coupled with the fact you don't need to dig that deep to get deeper than the frost line, its usually just really not worth it. So its not that they can't be built, they just can't be built economically.
Really wealthy people in Texas might have a basement; its not impossible! Some really old homes before slab-style construction might have basements as well. Or they might be living in the high deserts out in West Texas. But like easily 99.9% of homes built in the majority of Texas do not have basements. If I were to ask everyone I know if they knew anyone who had a basement at any time in any home they ever lived in, the answer would probably be "no" almost every time. Finding a home built since the 1940's in this area that's less than $10M with a basement is practically finding a unicorn. Except its an expensive unicorn needing constant maintenance.
Not sure about the rest of the state but definitely no basements here in South Florida. I haven’t even seen any houses w a crawl space when I was moving here. Pretty much just concrete block construction on slab. Can’t really dig far on a swamp…
I guess you guys have some firmer land up there. Here if it isn't pure swamp, its limestone which water has no problem passing through, hence no basements in most locations.
-- this thread seem to forget bond is not meant to be punitive -- it's to make sure you come back to court - the 8th amendment protects against this - if the court is going to set an excessive bond - they need to grant latitude on how it's exercised --
His ex-girlfriend and CEO of Alameda really put the nail in the coffin. Turned on him for 250K$ bail, forfeiture of all assets and basically no prosecution (except some taxes) as long as she co-operates. Probably dropped the entire playbook of Sam and made the case irrefutable and ironclad.
It's good that she did, because he played her for a sucker. He routed that entire massive fraud, which she may have barely understood (we'll see), through her as the CEO of a fake company whose only purpose was to embezzle deposits from FTX customers.
She's not stupid, don't downplay her intelligence. She absolutely had enough knowledge, education, and know how to see what was going on, and had every opportunity to get out. She didn't because, like most of the people involved, she thought she would be free and clear because line go up
Isn't it a two-way fraud? Alameda defrauded FTX by knowingly providing worthless collateral for loans (FTT), which FTX fraudulently made using customer funds.
What do you mean no prosecution? She’s going to be a convicted felon. Just because there isn’t going to be a trial doesn’t mean she’ll have zero consequences.
It's entirely likely she'll land on her feet, write a book, get a netflix documentary, and end up on daytime talk shows talking about her new line of hemp handbags.
If she can semi-credibly claim to be mostly ignorant, and cooperates energetically with prosecutors, anything can happen.
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 one source so they can flush out some of his hidden buckets. Who knows how many wallets, cash and favors he's hiding, but the Feds and Internet investigators will be watching. Especially for movements on the blockchain.
> A recognizance bond is a written commitment from the accused to appear in court when ordered. In return, Bankman-Fried’s camp would not be required to meet the full collateral requirements on the bail.
Doesn't look like that's what's happening. It's not clear how much money's changing hands, but it's definitely nowhere near the full $250m.
CNBC says 8-10% is likely, with the real numbers known once the filings come out. And 8-10% of $250 million is... a lot more than SBF's claimed few hundred dollars.
>"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.
Per "tech" nonsense, SBF is continually portrayed as some sort of genius "executive", but he had no clue how to run a business, he's now broke, getting arraigned in federal court and his parents are bailing him out. If his parents' house has a basement, he will now be in it playing video games.
Will the judge call him "brilliant" as in the Holmes sentencing.
> Only a few days ago he declared he had less than 100k on his bank account and now he forks out 250m?
No, he (or one or more other people on his behalf) secured a $250m bond. Bail bonds generally cost significantly less than the amount of bail; in many states with a maximum or exact amount set by law. In New York, the maximum is 10% up to $3000, 8% for $3000-$10000, 6% for the amount over $10000. At $250M bail, the bond is a hair over $15M.
But when you pay a bail bond to a bondsman, you never get that 10% back. You are paying for the service of NOT having to put up the full amount, as the bail bondsman is the one who is ultimately on the hook.
I highly doubt anyone paid $25 million that they aren't expecting to get back.
This dude embezzled like 7B and you think he doesn't have 250M squirreled away in crypto he can't pledge to some psychopathic billionaire buddy of his?
I don't think anyone is going to take a 250m credit risk on you if you only own 15m. And I don't think the bail would have been set in the hundreds of millions if the judge wasn't convinced SBF was loaded.
They will likely not being using a bondsman. They are probably paying the bond (ostensibly) themselves. They are taking a $250m loan using their house as collateral. If SBF does not make it to court on the agreed date, his parents will lose their house and be on the hook for the rest of the loan. If he does, his parents get the $250 million back and can pay off the loan. Until then, they are likely just making interest payments.
You can think of bondsmen as essentially very specialized financial institutions. They provide loans to people. If you have a $5000 bond, you can pay a bondsman $500 to front the other $4500 for you. If you make it to court, they get their $4500 back and it's all good. If you don't make it to court, they are incentivized to find you to make sure you make it to court. They are usually not pleased to do this.
You are not required to use a bail bondsman to post bail.
> Stanford professors make around $180k usually. There's no chance they're paying regular interest of a 250m loan without some financial support.
There is no $250M loan. Should he fail to appear, he and each of his sureties (his parents) can be pursued by the court for whatever remains of the balance of the $250M bail amount.
There is no actual $250M that changes hands until then (or, realistically, after.)
Not quite. You pay a bondsman 10%. The bondsman turns around and pays the full bail amount to the court. If you show up, the bondsman gets their money back from the court but keeps your 10% as a fee. If you don't show up to court, the bondsman does not get their money back and is left holding the bag for the other 90% of the bail amount.
What professor has $25M lying around to pay the bond? Yes, Palo Alto homes are expensive, but those are not typically the homes professors are living in.
I doubt they used a bondsman. $25 million is a pretty steep fee. They likely paid the entire bail amount and will get that money back once SBF shows up to court.
If you use a bondsman, you lose the 10% no matter what. If you use a bondsman and skip town, you're out 10%, and they're out the other 90%. Hence why bondsmen employ bounty hunters.
> But you can often get a bail bond (from a third party) for 10%-20% of the bail amount.
In most states, 10% is closer the legal maximum than the minimum premium for a bail bond (it is often exactly the the legal maximum, but in NY the maximum for large bail amounts is much lower, asymptotically approaching 6%.)
I read the same two things in the article and scratched my head. I mean, I assume the entire $250 million mentioned didn't have to come from the home, the way its written it could be a modest home. None the less, it makes me very curious what the actual value of the home is estimated at and where he materialized that much in assets supposedly out of nowhere.
I'm surprised anybody would be willing to risk $246 M for a known fraudster. And I highly doubt their home will still be their home when this is all over.
His parents now have a very good incentive to make sure he makes it to court.
Once he makes it to court, that $250 million is paid back. The only thing the parents lose would be the interest payments on the loan from now until the court date.
I don't see them having that kind of money. They've been on the receiving end of the loot, it's essentially being allowed to leverage stolen money in order to finance the bail.
Probably a judge doesn't care where it comes from and the bail bond people see the risk the way you do but it is a bit weird how a person suspected of crime at this level is allowed to await their day in court in freedom while others are immediately jailed because they didn't steal enough...
While it is likely true that they are likely leveraging assets acquired through his fraud to post bail, legally, we have to give them the benefit of the doubt. The only way I can think of that they wouldn't be allowed is if the assets themselves were evidence in the crimes. And there's also the murky bit where the house itself wasn't fraudulently purchased, so if SBF is found guilty and he must pay back all the money, if they were able to come up with the money through other means, they could keep the house.
Next, they aren't using a bondsman. I doubt any bondsman has $250 million to dedicate to this for any length of time.
And they are allowed to wait "in freedom" because bail was posted on their behalf. Those are the rules of the system.
It doesn't cone from anywhere, its a promise to pay (with a very streamlined enforcement process), not a transfer of funds.
> and the bail bond people see the risk the way you do but it is
There are no “bail bonds people” here, unless you mean his parents and the other two sureties.
> it is a bit weird how a person suspected of crime at this level is allowed to await their day in court in freedom while others are immediately jailed because they didn't steal enough...
Money bail is a problematic system, sure, but it also doesn't work the way you seem to think it does.
I suppose this is equivalent to writing an option for a very unlikely downside event.
- Pledge $250M in exchange for $4M collateral and $X in interest (?)
- Near certain outcome of SBF showing up into court, unless some 4-D chess plan has already been contrived to have him and parents flee (what career do they flee to? Each of them?)
- Collect risk-free interest
In the case that this trade blows up, you then call Talib Nassem and tell him you have another anecdote of underpricing tail risk and he'll write about it in his next book on the folly of underestimating black swan events.
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.
> Bond is a percentage of bail that you pay to someone willing to put up the entire bail
Bond is actually whatever arrangement you make that the court accepts as surety in place of depositing the full bail amount as cash. Most commonly, this is paying a premium to a registered bond agent (who usually also does not pay the full bail up front), sometimes, its having other persons aa sureties who are liable for the bail if you don’t appear, or pledging other property as a guarantee, or, as in SBF's case, both, where his parents home is pledged and his parents are liable sureties.
But it's possible they found some other money lender, not a bail bond specialist and got (improbably) better rates than 10 percent upfront, nonrefundable.
How does he have 10% of that?
"His parents, both Stanford Law professors who were present in the courtroom, will put up the equity in their home to partially satisfy bail conditions."
Sure their bay area home is worth millions but not that much.
"His parents, Stanford Law professors Barbara and Alan Bankman-Fried, have agreed to put up the equity they own in their $4million California home, where he will live during his house arrest, as part of the bail requirement.
Two other people - one relative and one non-relative - will fulfil the rest of the bond. It remains unclear if he is required to pay the full $250million or a portion of it."
People with 8 and 9 figure bail don't go to the bondsman on the corner. They usually have their own armed guards from companies like Guidepost Solutions enforce their home detention and it is usually secured by bank accounts or real estate owned by their family or other rich people they know.
Seeing as I'm all but entirely ignorant on the nature of large-figure, high-profile bond guarantees, do you (or anyone else) have references for what arrangements are typical?
But generally that is a fee not a deposit the detainee gets back. That's a big fee.
From me understanding some jurisdictions will allow you to cut out the bailbonds company, and give a 10% deposit for the bail (still on hook for the full money) maybe that is what happened here?
The fact that they are Stanford law professors means that it all works out. Somehow. (That part surely must have been relevant in that sentence, since it was included.)
Parents are on the hook for $250M if he dips. Judge had to have looked at their financials and had some assurances that they'd be able to pay this right?
It would be hilarious if he posted bail in FTT. And if there wasn't enough value there, I suppose he could have dipped into his “hidden, poorly internally labled ‘fiat@’ account”.
It matters if the people putting forward that cash were compensated by the scheme; Ie, if his paying bond (and potentially skipping town) is performed in a way to reduce compensation to the fraud/bankruptcy claimants.
A 2007 NYT article describes particulars within the context of one case. In part:
To hear Ms. Weinstock tell it, Ms. Chanla was the ultimate flight risk. She was foreign born, and lacked ties to New York. She swapped identities like a chameleon, using at least two different names, the prosecutor said.
A week ago, detectives with a New York arrest warrant knocked on the door of “her Los Angeles home,” the prosecutor said, and found her parents, who “claimed they had no way of getting in touch with her.”
The more thorny scenario I’m wondering about is when there’s a person A who is attempting to post bail for person B, but there’s reason to suspect person A may be implicated in the same crime or a related crime as person B. Person A may very well be willing to lose that money with the expectation that person B flees and doesn’t implicate them.
That could be, though what value SBF might have to someone that's worth giving up $250 Large Large (and SBF's parents) raises any number of interesting speculations.
I know he’s presumed innocent, but I thought they would effectively confiscate all the alleged “spoils of crime” as evidence or freeze it. I’m guessing that’s why it’s backed on a single residence and not other assets?
I wonder how he will pay for lawyers, my understanding is that law firms are incredibly meticulous about wanting proof that their fees aren’t being paid using spoils of crime.
It's important when possible to hold conspiracy theorists accountable for being wrong. So I wanted to draw attention to this popular HN story from a week again:
This doesn't make sense in my opinion. He basically waived the extradition process in the Bahamas. It is very likely doing that provides the court assurance he won't run. He could have very likely fought it for years there. Not fighting the extradition process and then going on the run doesn't make any sense to me.
It really is bizarre seeing how some people are complaining about a $250 million bond as being a "slap on the wrist". It's not a fine, it's not a punishment -- he hasn't even been convicted of anything yet. He is nothing more than a pre-trial detainee. And, yes, being under house arrest still constitutes detention.
Just seems like there's so much bloodlust here against someone who -- under the United States Constitution -- is still presumed innocent until found to be proven guilty beyond a reasonable doubt in a court of law by a jury of his peers. Sorry.
This is not bloodlust. SBF has squandered away billions, including investing several hundred millions in himself. A bond is intended to be high enough so that fleeing will be unlikely but, given SBFs history, him wasting another $250 million doesn't seem that improbable compared to what he pulled off this year.
Not only high enough to make it unlikely for him, but if there have been other financial dealings (say, money laundering, offshoring, or various forms of criminal activity), which might serve interests to not see surfaced in court, then to make disappearing him overly financially painful for them as well.
I find this kind of weird. If he is a serious flight risk he should NOT have been given bail at all. If not, then, to be honest, 0.25bn USD seems pretty excessive.
It strikes me that the only people who could afford such a bond would be those actually guilty of a multi billion dollar fraud. If you're innocent, you'd be stuck in jail...
I wish we, as a society, could decide whether M is thousand or million and then only use it to represent that one concept. From the headline I initially assumed his bail was only $250,000 and I don’t think I’m the only one in this thread to have made that mistake.
It has its roots in Latin. Mil means one thousand, so mil mil, aka million, is one thousand thousands. You'll see it in places that do more romance language family business, or in accounting where it's an old convention even in English.
Its less common now, but historically the latin-derived “M” for 1000s and “MM”
for millions was dominant in finance and accounting; metric-style “k” for 1000s and “M” for millions has become more popular, but you’ll occasionally still encounter the other style.
M means milli in Latin, as in thousand (kilo comes from Greek). Millennium, millipede (thousand legs), and so on. Million just means a thousand thousands. That is why in most financial institutions, M means thousand, and MM means millions, literally thousand thousands.
Which is weird to me, because MM in latin numerals is 2,000
There is a way to express one million as M̅ (horizontal bar above M for M * 1,000), but I think this was a later addon that was not used by the Romans. They probably rarely had to deal with numbers in the millions and if they did, they could just express them as a product like M * M
Yes, for billions at least. Never personally saw a bank transaction for a trillion dollars.
You are correct the others are easier, clearer, etc. But banking goes back centuries, millennia even. When an entire industry uses a certain nomenclature, no individual participant wants to go through the hassle of trying to change everything.
Or perhaps institution see some value in keeping a consistent denotation when you have records spanning hundreds of years, multiple counties, and multiple languages.
Caroline Ellison appears to be flying under the radar here. Granted she kept her mouth shut but what's keeping others uninterested here?
Also any informed opinion regarding her plea deal: Generous, not-generous, unusual, routine? ianal but 110 years to 0 years seems pretty sweet. Also didn't note any agreement to forever stay away from other people's money (since she agreed that she "is in fact guilty" [of conspiracy to defraud, wire-fraud, ..]
Not so fast. The plea agreement does not include immunity:
> According to their plea agreements, Ms. Ellison and Mr. Wang are expected to truthfully disclose information to investigators, provide requested evidence and appear in front of a grand jury or court proceeding if asked. In exchange, the government will inform the judge of the defendants’ assistance and request lesser sentences.
I'm not sure. There was almost no paper trail, no accounting. Testimonies will be used to fill in the blanks and strengthen the case. She'll get a good deal.
Sure, but what does that mean in terms of protecting as yet unnamed persons connected to this saga?
This promise to sing for prosecution is presumably not good news for SFB, that is understood. But SEC official names were being dragged into this when it broke via guilt by association. And that connection was via Caroline and her family. Maybe a nothing burger, but maybe there is actually some beef involved. How does this plea agreement affect that potential and alleged connection, in legal theory?
Jeeze, it's not some crazy conspiracy that being the first to rat out your accomplices tends to leave you way better off, it's literally intentional, to encourage turncoats.
She's pleading to what, seven major felonies as I recall? And there is no agreement on a reduced sentence aside from "the prosecution will ask for lesser sentences" which doesn't mean the judge is going to agree. She didn't get some kind of a sweet deal, she got the "we have enough to put you in jail until you're elderly, but if you make it easy we'll ask the judge to reduce it so middle age" agreement. They clearly have the upper hand.
ianal. There are conflicting interpretations of the agreement. This is from coindesk:
"The agreement states that if Ellison fully cooperates with the SDNY's investigation, as well as any other law enforcement agency designated by the office, she won't be further prosecuted criminally except for possible criminal tax violations with regard to the wire and commodity fraud charges that resulted from commingling funds between FTX and Alameda accounts. The deal does not guarantee that other agencies will not pursue prosecution at a later date."
Different potential charges relating to taxes are on the table but that guilty plea to seven counts of felony carry no prison time. So it is "110 to 0 years" modulo potential tax related charges, if any.
Note: as a practical matter, SBF's out-of-pocket is probably between 25-50 million (bondsmen normally charge 10%-20%, depending on risk factors and bail amount), and SBF's parents have this much in assets and savings to cover it (and can probably take loans to cover any shortfall), though this will definitely wipe out any of their legitimate holdings.
But bondsmen don't have to just cut you loose with zero oversight. For a small slice of the $25m they can hire a team to follow him around 24/7. I assume they also put him in a ankle tracker and have him checking in on a strict schedule. All of this cuts into their profit so it's only as risky as they are cheap about monitoring him.
> If the defendant fails to appear in court, the bond agent is allowed by law or contractual arrangement to bring the defendant to the jurisdiction of the court in order to recover the money paid out under the bond, usually through the use of a bounty hunter.
Not only can they detain him, if he missed court, they can quite literally hire bounty hunters to track him down and bring him to the court so that they can get the money back.
If you commit crime in the US it better be big and for a lot of money (>$100M) or you’re in trouble. Just over 10k is the highest legal risk per crime dollar.
Over $100M you can game the justice system at the highest levels in most cases. Ask HSBC or Hunter Biden.
I don't understand why people find it so unbelievable that some people would choose to end their lives than face the reality of spending the rest of their life in an American prison.
just a random thought, I was watching narcos and they took away escobars belt in a poor shithole of a Nicaraguan prison decades ago so he had to hold up his pants with tied plastic bags.
the fact that the richest country on earth cannot prevent the suicide of one of the highest-profile criminals (and a high profile witness to lots of things) in a completely isolated controlled environment seems extremely bizarre to me. Like, when I've read that people are overdosing in solitary on San Quentin death row bizzare.
I touched on this topic when this all bubbled over a week or so ago [0]. I got down-voted for somehow implying a comparison between H Epstein's pedophilia etc to SBF's financial crimes (which, looking back, was a rather hilarious and bizarre conclusion some drew).
YMMV. I wish you luck!
IMHO, I think that he doesn't have enough incriminating information about political figures to be "hit-able". He must have some information about the Democrats' shady financials, likely going way up, but let's face it, we all know that already. This contrasts H Epstein, who likely knew which political figures were pedophiles, sexual predators, and all that horrific business, which is far worse and likely led to the "anomalous events" that occurred during H Epstien's arrest.
> must have some information about the Democrats' shady financials, likely going way up
There is zero chance he has inside insight into anything. D.C. is filled with new money throwing around millions. The point isn’t to get access. It’s to convince the politically unconnected that they have access. They get a photo, the candidate gets cash.
It's so wrong that rich folks can just skip jail. I'm just reading Harari's Sapiens, and one of his points is that it's crazy that today it's accepted that poorer people are discriminated against. That many people think that being poor is a not something that happens by chance, but by people being lazy or dumb.
It's wrong that poor people who aren't a threat to society are imprisoned because they can't afford bail, not that rich people aren't. Don't think that the way to get rid of the disparity of privilege is to take it away - it is to grant it to more.
I see a lot of news articles in Seattle about people that were released from jail by a judge with no bail while they wait for trail and then go on to commit even more serious crimes (arson, rape and murder) in the following days.
I think society struggles with knowing who is a threat and who isn't. The consequences of being wrong is rape, death, and arson.
> released without bail and was arrested 10 hours later for arson
> Fulk is a convicted felon and was arrested just eight days earlier in neighboring Pierce County for threatening to kill a Pierce Transit public safety officer.
> I see a lot of news articles in Seattle about people that were released from jail by a judge with no bail while they wait for trail and then go on to commit even more serious crimes (arson, rape and murder) in the following days.
Yes, and that happens with people released on cash bail as well as no-cash-bail; there's no evidence, despite the fact that large no-cash-bail jurisdictions have existed in the US for quite some time (D.C. has been essentially no-cash-bail for three decades, for instance) that having money in the mix for pretrial release protects against that.
That's because it makes the headlines- working out the real statistics wouldn't even be that hard and would totally remove the need for such sensationalist nonsense, but of course that doesn't pay the bills.
It's not easy to work out the statistics because the vast majority of crimes go unsolved. The sensational headlines are the ones where criminals managed to get caught. The ones who were out on bail (or released on their own recognizance) but didn't get caught won't show up in the stats.
A cursory google suggests that 50% of murders go unsolved. Obviously people out on bail are far more likely to be investigated than those who aren't (especially considering that the intersection of "criminals who haven't gotten caught" and "people out on bail" is empty, so we're looking at the finer category of people who have been caught once), but lets pretend that the opposite is true, and that every single unsolved murder is committed by someone out on bail. That utterly made up statistic would still have more value than every such fearmongering headline combined.
There are many more crimes than murders, and the chances of getting caught are much lower. For example: in San Francisco, the clearance rate for reported larcenies is 2.9%.[1] So a thief can expect to steal another 23 times before having a 50% chance of being caught. SF's 6.4% clearance rate for vehicle theft means that a car thief can expect to steal another 10 cars before getting caught.
I presume the actual distribution is highly skewed, so “expect to steal another 10 cars” is likely better said as something like “expect to steal twice as many cars than they have already stolen” plus a clearance rate for a first time offender. Obviously difficult to get reliable information on the true distribution - but perhaps can be predicted by the outlier fat tail?
More simply put: much more than 50% of people that have stolen 1 car will get caught before they have stolen their tenth car, and if someone has stolen a hundred cars then their chances of getting caught before stealing 110 are much less than 50%. Edit: note that my figures don’t match your numbers - they are only examples.
> the intersection of "criminals who haven't gotten caught" and "people out on bail" is empty
This is not likely true, and it is definitely not necessarily true.
There are quite likely people out on bail who have (1) committed at least one crime, (2) never been identified and arrested or charged for any crime that they have committed.
Uhhh… what? So what level of rape/murder is appropriate/acceptable for criminals out on bail to commit, statistically speaking of course?
I’m pretty sure the rest of us think it should be 0… but maybe that is just me. 3 notable examples in the last 6 months in one area… not zero… not anywhere close.
Obviously higher than 0, all else being equal. I have priorities other than keeping people locked up on the off chance that a tiny fraction of them might commit a crime- given that most people would at least claim to support fair trials with evidence and such, I suspect that 0 is actually a pretty rare response.
edit: I think your edit made things a little clearer. I doubt we agree, but we've talked past each other here. The relevant statistic is [number of people who commit crimes on bail]/[number of people released on bail]. If we had Minority-Report-style precogs, we could have had 0 such cases in the last 6 months while denying only 3 more people bail. But we don't have that option- there's not much to be done about the sensitivity, so all we can do is crank the cutoff of doubt higher or lower.
With tens of thousands of people released on bail, and assuming that identifying the nth potential murderer roughly follows a power law distribution (a fairly reasonable assumption in a sensitivity/specificity situation like this) we're talking about jailing thousands of innocents to prevent one guilty man from going free. If look at violent crime in general the numbers are less skewed (around 2%), but I'd hope that most people balk at the idea of preemptively jailing ten people without trial to prevent just one from committing a crime. I mean, recidivism rates after prison are way higher than that- perhaps "the rest of us" would favor life sentences for every crime, but I doubt it.
Bail is a filter. People that are functioning in our society and have something to lose will have earned the resources (either financial or social capital) to post bail.
People that are not functioning on any level (just because they're low-income doesn't mean they don't have friends or family to help) should be treated with caution, because they have nothing to lose.
They already are facing jail, so why should they try to function?
> So what level of rape/murder is appropriate/acceptable for criminals out on bail
What level of rape/murder is acceptable from criminals who have not yet been charged with a crime?
The answer is the same as for your question, so unless we are going to preemptively detain everyone not yet charged with a crime, I don't see how the answer to your question can imply we should lock up people who are charged but not convicted.
I don’t know any poor folks that have had a $250 million dollar bail. Bail for first time offenders ranges from $500-$2500. It is just collateral, you don’t actually pay it if that wasn’t clear. If you can’t temporarily post bond there are 100s of companies out there that will post for you for a small fee (fractions of your actual bond). Is it perfectly fair? No, but I don’t think it is a terrible system either.
Generally for first time offenders that are not a threat to society and unlikely to skip court, bail is waived altogether.
> It's so wrong that rich folks can just skip jail.
He hasn't been convicted of a crime. What's wrong is for people who haven't been convicted of a crime to spend time in jail, especially in situations like this where he isn't posing a physical danger to the community (and indeed won't even be leaving the house anyway).
I didn't make a statement whether jail is good or bad. My point is that people who can come up with money (to post bail) shouldn't be treated differently than people who don't have that money. Your financial situation should play no role here.
I am not from America, but iirc bail doesn't exist after you have been sentenced to jail, it's only to make sure that you will come to your trial? In Germany, you are only held in jail in the time before the trial if there is a reasonable suspicion that you might flee the country or commit other crimes.
Yeah, bail is basically a deposit promise that you'll come to the trial when it comes up. Some trials take a few months to a year or two to come up on the docket depending on how busy they are.
Bail is usually proportional to your crime and there are businesses that will pay your bail if you give them 10%. They take the risk and will send a bounty hunter after you if you skip bail.
Some states like California are testing out non-cash bails which is probably similar to what Germany does. If you do something evil like murder, you stay in jail until your trial. If you're harmless and not looking to escape the country, they let you go.
To be clear: bail is not for criminals, it's for people accused of a crime.
Which is not to say if you commit murder, you go to jail without bail.
It's if you're accused of murder and made to stand trial, then you go to jail without bail, regardless of if you're guilty or not.
Really messes with poor people because if they don't have bail money, they either:
1. Sit in jail for a few months, unable to work, while their bills pile up, kids go uncared for, and rent is due.
2. Pay 10% of bail to a bail bondsman, who keeps the money regardless of if the accused is innocent or guilty, just so they have the privilege of walking free while awaiting trial for a crime they may or may not have committed.
Thank you for highlighting some of these distinctions.
It seems like in online discussions, and especially in the recent US midterm cycle where crime was said to be an issue, and hell, I've even seen this when I've been called for jury duty ... Many people seemingly do not understand that police or a district attorney accusing someone of a crime is not the same as guilt.
I would say even that many times a conviction doesn't really mean that. We as a country accuse and convict a lot of innocent people, have an unfair punishment mentality, often charge in excess of a person's actual misdeed, etc.
And all of these problems and more are amplified when the accused doesn't have resources to fight it.
I think it is supposed to be tied to how likely you might be to flee. So a rich person accused of a crime that could lead to the death penalty would have huge bail. (Or likely not be given bail at all.). A poor person accused of a minor crime would likely have a very low bail.
It’s usually more about flight risk. “Have nothing to lose” is the phrase that’d be associated with people who can’t afford bail.
It’s a tough situation because optimally no one who’s not a flight risk or dangerous should be in jail. They’re all innocent, after all, until they have trial. A financial hostage is just the easiest to implement.
That seems like a deeply weird perspective to me because where I’m from (Germany) bail just isn’t a thing. At all. And we do totally fine.
Whether or not someone is held in jail before trial is determined by whether there is a risk that they might flee, destroy evidence or influence witnesses and that judgement has to be taken in a proportional manner (so e.g. if jailing someone before trial would likely put them in jail longer than their potential punishment then you can’t do it).
It actually doesn’t happen that often.
As is often the case with criminal justice one of the biggest issues is actually that it just takes too long until there is a trial and this often also leads to problems with the duration someone sits in jail before trial. Six months are supposed to be the usual upper limit, in practice, however, that line is frequently crossed. So the thing I would want to improve in Germany is time until trial. (And: this is also not to say that this system is perfect. For example, people without a home are empirically much more likely to be jailed, even though the Constitutional Court determined that just the mere fact that someone doesn’t have a home isn’t a valid reason to consider someone a flight risk. Every individual case is supposed to be considered on its own terms. In practice that obviously doesn’t work perfectly.)
As for the US, you need judges to decide whether and how to set bail anyway, just get them to decide on flight risk and risk of tampering with evidence or witnesses instead.
Currently there are around 12,000 people in jail awaiting trial in Germany. In the US there are around half a million people in jail awaiting trial. Normalizing for population that’s around 150 per million in Germany and 1,500 per million in the US. There also seems to be about a five time difference in the crime rate (if we are focussing on violent crime) with, for example, five times more murders per capita in the US. So, even taking that difference into account the US still seems to be jailing about double the people Germany does pre-trial. Doesn’t seem like a great system …
(Obviously all back of the napkin calculations. Please check my numbers if you think there’s anything wrong with those.)
> "... people without a home are empirically much more likely to be jailed... "
When I was briefly in jail I met several people without a home who had commited petty crimes with the explicit intent of being able to spend a couple days in jail. One fellow I saw return three times with less than 24 hours between each visit.
If you have nothing, then it's pretty logical to think that they have less ties to the community they're in vs someone who has a home, business, etc and uprooting is much more painful if you try to flee.
That’s not logical at all. A lot of poor people have strong ties to their community but still no money. You could argue that it’s much easier for rich people to flee. Poor people can’t afford to flee.
> That many people think that being poor is a not something that happens by chance, but by people being lazy or dumb
There are certainly motivated, intelligent poor people. But if you don't think lazy & dumb isn't over-represented amongst poor people, then you've been leading an insular life.
> It's so wrong that rich folks can just skip jail. I'm just reading Harari's Sapiens, and one of his points is that it's crazy that today it's accepted that poorer people are discriminated against. That many people think that being poor is a not something that happens by chance, but by people being lazy or dumb.
Maybe Harari doesn’t realize that the true arbiters of right and wrong—no matter what people might think—are people with power. And often is people who are rich, although they might have no formal power.
Perhaps, but the issue is more that some people can't skip jail. No one should be in jail - they're innocent. It's a imperfect solution necessary because some people will flee, or commit further crimes (possibly retaliatory). Bail is just an easy "solution" - a financial hostage. For people with nothing to lose, it's hard to find a way to encourage good behavior before trial.
I wonder if this whole thing counts as “effective altruism”? Maybe he is effective at scaring other crypto “adventurers” (i.e. people who like to play with other people’s money as if they were in the wild west) and the number and size of scams diminishes in the future? That’d be a good badge to have on his boy-scout t-shirt (or whatever boy-scouts use).
More like a 25 million donation - flanked by an inexplicable (in hindsight) expectation that somehow, from somewhere, 225 more would eventually materialize.
Of course it is - it's how libertarian billionaires justify funnelling money into things they want to progress, rather than give back to the country that has provided them roads to ship products, the internet, an educated workforce etc. etc.
Likely needed 25M for actually posting bail. He also did a lot of nice things and has a lot of friends, not to mention family. No big stretch of the imagination here.
Bail doesn't work that way at this scale. His parents put up the deed to their house, and a couple of really rich friends showed that they have $250 million in assets and agreed to let the government seize them if SBF doesn't show up. No cash really changes hands.
In my experience, pretty much everyone without a record, or has always shown up for court gets ROR’d (released on own recognizance) for non violent crimes. The people that get screwed are the ones that skip court dates and then get caught again. If someone gets caught shoplifting and the cops find a gram of heroin in their pocket, it is common to be ROR’d after 24 hours in the tank if there are no outstanding warrants for skipping court. If they skip court and get caught again, the bond will be like $5000. If they are poor, they will spend a week in county jail, dry out, get on Suboxone, get assigned a parol officer, and hopefully be on a better path. Bail is meant to encourage people to show up for court and is needed for people who have a history of not doing that. It is less of a rich/poor thing, but rather a history of skipping court vs not skipping.
It is grossly unfair to the poor and the not-so-poor. It's a two-tiered justice system where the politically connected have different rules applied to them than the rest of us.
Innocent until proven guilty, presumption of innocence and so on. The system is insane, but not for the reasons you seem to think. It is unfair to the poor.
When I needed to post a large bail I couldn't afford I got a personal loan so I wouldn't have to forfeit the bond amount. Bail bond companies are mostly a tool for those without any assets.
No, the bond company posts the entire amount and keeps the 10% you paid them as their fee. This is why they employ bounty hunters to track you down if you try to skip.
The Democrats' Senate Majority PAC is planning to return $1M contributed by SBF and $2M from Nishad Singh; the House Majority PAC got $6M from SBF and "will send funds in question wherever authorities instruct us". Source (and more details): https://www.cnbc.com/2022/12/20/ftx-democrats-senate-majorit...
My understanding is that SBF also made similar contributions to Republicans and conservative PACs etc, but generally hid them (e.g. by giving in other people's names), so those may be harder to track down & return.
> Is there any evidence at all of him giving “similar” money to republicans, other than his own word (which is garbage)?
The indictment (which required providing evidence to a grand jury for each count to establish probable cause) includes charges of illegal concealed-identity political donations. While it doesn't specify the recipients, this is consistent with his description of how he donated to Republicans to avoid criticism for such donations.
FTX’s bankruptcy management has said they expect to get it all back by legal means if necessary, and it’s no excuse if you donated the money to a charity:
How can you feel sorry for them? They're professors of LAW at Stanford. And this white-collar crime was being committed right under their noses. Pynchon would have had trouble coming up with a plot this wacky.
SBF just played along with the sheer insanity of the concept of crypto (nothing can make nothing) and all the fools who gave him money - it seems that common financial sense is not taught to people anymore or is really in short supply these days.
Did people actually listen to him whenever he spoke - whenever did any of his BS make any financial sense ???.
Defrauding willfully ignorant people is still fraud and still a crime. You shouldn't be excused for doing bad things by doing them to people who aren't the brightest or best.
I mean, that's what I'm wondering about his parents. They must have known, or at least had a feeling. And not looking into that and giving your child some advice not to go down this path, or to be careful, and at the very least, not to get involved yourself, that would have been the responsible thing. Maybe it's the blindness we can all fall prey to when it comes to objectively thinking about our blood.
Is the implication that technology (like blockchain and digital currencies) and financial operations (like brokerages and exchanges) can create no legitimate wealth? Because I might humbly suggest this forum, which is run by a venture capital firm specializing in technology, might not rush to agree with you.
Less humbly, if you're suggesting labor is what makes things valuable, that's possibly one of the worst ideas in the history of economic thought. SBF might be a fraud, but it doesn't implicate cryptocurrencies, much less capitalism.
> I feel sorry for his parents - legal fees is going to financially wipe them out and any plans for retirement.
Losing your money sucks but it's preferable to losing your freedom. It is very likely the parents are guilty of abetting or enabling the fraud in some way.
SBF "agreed" to be extradited, that implies some negotiation. The only possible incentive I can think of him agreeing to what is shaping up to be a slam-dunk case of a very long prison term, is immunity for the parents.
I seriously doubt this. The long-term ability to improve one's "experience" in exchange for financial renumeration (i.e. bribes) is certainly much greater in Bahamas than US. It's also far from certain that Bahamas, on its own, could prosecute and convict SBF.
you're right. When going against the feds you are taking a huge risk trying to go to trial or otherwise fighting them. From their personal financial perspective and more likely also in their interest as SBF's parents, they'd be best served with taking the plea deal SBF is offered.
Bullshit. You are perfectly capable of letting your children be punished for their negligence or stupidity, and any action to lessen that punishment will just show them how far you are willing to sacrifice your own life to keep them from learning a hard lesson.
They know he knowingly defrauded millions of people out of billions of dollars. If I did that, my mom would let me go to prison for the rest of my life because she knows she taught me morals and that human beings are more important than money and if I decide to ignore that moral framework as an adult then that's on me. Dude is an adult with a fully formed brain. Stopping a twelve year old from burning themselves on a hot stove is one thing, but if your fully adult son still needs to told not to touch the hot stove, it's time to let them fuck around and find out themselves.
That all assumes they had no idea what was going on, which I don't know is believable.
I disagree. Especially when your child is all grown up:
- You can balance their welfare vs. other goods, e.g. justice, well-functioning society, etc.
- Your view of their welfare can include their character, maturity, empathy, and taking responsibility for their actions. It sucks if that requires 20 years in prison, but that may be preferable to helping them be a free but terrible person for the rest of their life.
Gary Wang and Caroline Ellison did make a plea deal so that makes it seem like they are going to fully prosecute SBF. Any deal SBF makes will likely be to keep him from spending the rest of his life in prison.
It has been said elsewhere that he may be able to cooperate with forthcoming indictments of other players, such as CZ. So far though this is just speculation.
Also, it's fairly common for someone to initially plead "not guilty," even if they're planning to change their plea to "guilty" later. IIRC if you plead guilty, you can't change it later, so it's usually best to leave your options open.
If I was a prosecutor, I’d definitely be wanting 100% disclosure of all the dirty stuff he knows others are engaging in. For sure, CZ is probably regretting not having followed through with the purchase of FTX, which he could have then swept under the rug.
Tangenially related: There's an ongoing scandal in the EU dubbed Qatargate[1]. It appears Qatar bribed EU politicians to buy influence. Starring MEP Eva Kaili, vice-president of the EU parliament. A journalist noted her suspicious involvement in the crypto space in the past [2 (article in Greek)].
Quote:
> In 2018, during a meeting at the Delphi Economic Forum, I asked the MEP how we could explain the complex blockchain technology and explain its potential, so that the ordinary citizen and small and medium-sized enterprises - as she claimed - can benefit from decentralised financing.
> "People don't necessarily need to understand them", Eva Kaili had replied with a smile, after a sharp pause and a brief elaboration. "Cryptocurrencies are a bit like weather - you can enjoy their benefits without knowing in detail the process behind them."
Well. I feel that we are barely scratching the surface with "Qatargate".
I'm so glad to have exited crypto years ago. The space is filled with get-rich-quick people, apparently they don't even understand how blockchain works.
‘He was released on bail for a $250 million bond — “the largest ever pretrial bond,” apparently — secured only on his parents’ home in Palo Alto, where he will be living.
’SBF will surrender his passport and remain in home confinement with electronic monitoring — he’ll wear a bracelet. He will also be required to undergo regular mental health evaluation and treatment. No financial transactions over $1,000 except legal fees, no new lines of credit, and he can’t start a business. Also, no firearms.
’That is: Sam lost all his money in crypto, and has moved back into his parents’ basement.’
https://davidgerard.co.uk/blockchain/2022/12/22/ftx-sam-bank...