>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.
Evidence seems to be building that, if they weren’t complicit, they at least benefited from his fraud.
He discovered the Haber process around 1911, which was well before WWII and it was intended for fertilizer only. Eventually people realized that mass ammonia production was very helpful for chemical warfare, and many (including French nobel winners like Grignard) engaged in it.
The Zyklon B synthesis is a red herring.
The Court is not extending $250M of credit based on the collateral of the house.
The Court is assessing that the combination of the $250M penalty, the security given in the form of the claim on the house, the particular full sureties on the hook, the additional partial sureties on the hook for a lesser amount, and the nonfinancial conditions of bail are sufficient to adequately guarantee SBFs appearance (in part, based on the prosecution also accepting that.)
Or for that matter, if they had said that the penalty was $0, and that the securities and sureties were sufficient?
Presumably, they'll never find out, so perhaps it's moot. But I feel like there's a legal distinction or rule I'm missing.
I would not assume they know that, or that that is true.
In fact, I think there is plenty of reason to think that:
(1) SBF has control of assets exceeding $250M (not untainted, and they would likely be subject to criminal forfeiture if he was convicted and they were identified, but in the case of flight...), and
(2) He would not necessarily be successful keeping them out of the reach of a default judgement in favor of the US government if he fled justice
> Or for that matter, if they had said that the penalty was $0, and that the securities and sureties were sufficient?
Security and sureties apply to the penalty, and are meaningless if it is zero.
What argument do you think I'm making? The argument I'm trying to make is that an article serving as an explainer of a complex legal topic should be factually correct, even if it complicates the desired narrative. Do you disagree with this?
> Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets?
As to the bigger question of whether this bail arrangement is reasonable, I don't think we have enough information yet. $250M is an arbitrary large number, and I don't think a percentage is important. The real question is whether whatever agreement has been made is sufficient to pressure Sam into showing up for the trial. Personally, I'm worried that he may still have control of sufficient funds that he can afford to flee and repay in excess whoever takes the loss. But depending on who the unnamed unrelated party (or parties?) are, and what other assets are available for collection, maybe this worry is unfounded. I think we should call attention to the possible impropriety of the arrangement, apply pressure to find out the missing details, but reserve judgement until we know more.
It’s weird that you’re pointing out an irrelevant technical detail which misses the point of the opinion piece. The point is that SBF was able to walk out of jail without paying anything and the author finds this absurd.
Sounds like something SBF would find reasonable.
Phrased another way, we're about to find out if SBF is morally bankrupt enough to take away a huge portion of his parents assets as well.
If he has hundreds of millions hidden away, he could easily ensure that his parents get some of it later to compensate them.
That said, I don't think he will run. His parents are both Stanford law professors and he has an insane number of connectionsand people that owe him favors. I think he will go to court and put up a very strong defense and end up with around ten years in jail at the end of it all.
huge portion being +/-10x their net worth and a debt that can not be discharged through bankrupcy.
Never said it was and the whole point of this is not whether they put some collateral or not.
The whole point is, how come a 250M bail can be secured with a 4M house? That is the whole thing that is driving everyone nuts.
Divide by a thousand and you may be able to get a better graps of it. Imagine you have a bail set for 250k and you tell the judge, well I have this really shitty used car which (may be) worth 4k, you can keep it, but also you can't take it from me now because well, it's my car :). You would stay in jail.
It doesn't really look any different than normal bail. Maybe this is many people's first exposure to the concept of bail though. Bail is also not just a dollar amount, it's about convincing the judge you've put forward enough to motivate you to stay.
He’s a fraudster who was content evading justice in the Bahamas for years to come. Of course there is popular desire for retribution, even beyond that which exists and continues to build against crypto at large.
Seems to me that he made chart go up for no reason and everyone was perfectly happy with that, and when chart went down for the same reasons (i.e. fraud/no legitimate reason) then everyone is upset about it.
If people are upset about lesser offenses getting handled more aggressively, they should spend some time lobbying for lesser offenses to get handled less aggressively.
This is an absolute guess because I don't know, but I think a lot of it was average joe crypto-curious investors having their money stolen and then given to the smart financial firms who were on the winning side of his secret bad bets. There may also have been some pension fund involvement because they seem to be caught up in this stuff on a regular basis. (Because of the way bonuses work, managers can skim off the top by investing in known Ponzi schemes and taking the credit for the 20% returns. They know they're not going to have to pay those bonuses back when they're inevitably "surprised." This happened with Madoff and was a big contributor to his success.)
Also is it $10B in stolen deposits?! I seem to be coming across a $1-2B figure but admittedly haven't been following super closely.
Funds misappropriated by Alameda and spent on VC investments may ultimately have become people's salaries. Some politicians have announced their intention to donate an amount of money equal to SBF's contributions of customer funds, but it's unclear whether they mean "donate to my own 501(c)(3)" or "return to FTX to be paid to creditors" and the phrasing certainly sounds more like the former. Most of the funds were probably embezzled (you will hear these people say "loaned" I guess) by FTX/Alameda executives or lost as part of Alameda's trading operations. Recovery of trading losses is extremely unlikely, especially trading losses that occurred long before the bankruptcy on venues other than FTX. SBF and BlockFi are currently arguing that each of them should receive the $441 million of Robinhood shares that SBF purchased using customer funds. "Hackers" stole about $500 million of customer funds from FTX US and FTX Intl immediately following the bankruptcy, and these funds have (mostly?) made their way into RenBTC and been bridged to native BTC and sent to mixers.
Some FTX customers who withdrew funds as part of their normal operations will face clawbacks, and some other FTX customers such as Modulo Capital and @AlgodTrading who have essentially stolen from all other creditors will hopefully also face clawbacks, but the total amount recoverable this way is maybe $1-4 bn, and all of these people are creditors anyway, so giving the money to other creditors doesn't do anything to address the shortfall.
Then SBF allegedly moved those assets over to Alameda for risky trades, and also pulled some out to buy fancy houses.
The "billions destroyed" seems more likely to refer to the general "destruction" of nominal wealth which, I posit, wasn't real to begin with.
This is my honest read of the situation, you're welcome to disagree. I have no agenda, only an opinion.
We deny bail to serial killers to avoid putting lives at risk, not because they're extra guilty. There's no indication SBF is a danger to anyone around him, and the conditions of his bail include counseling in case he's a danger to himself. Maybe he does have a house in Argentina with a stack of unmarked bills, who knows, but that is that the bond and the ankle monitor are for.
I don’t believe in his guilt beyond even reasonable suspicion. I do think he is a flight risk. He is delusional enough to attempt it, and may have the hidden means by which to make it.
I'm totally game for working for a more equitable society where everyone gets to live in dignity even if they put their money into bad crypto exchanges though. Let's definitely do that, regardless of what happens in this case.
That it’s not a jail. Jails are tougher to get out of than ankle bracelets.
His parents are going to spend the rest of their lives fighting civil lawsuits, if not criminal cases of their own. Losing their home is a matter of time. It is difficult to even say to what degree their plight matters to him.
The love of a parent for their son. That's a benefit of doubt I'd need to see extraordinary evidence of sociopathy to discard.
It is, in fact, a $250M bail bond, people just have a very wrong mental model, based on a bad generalization from an already slightly wrong mental model of the terms when an arms-length bail agent provides surety to the court for the defendant, of what that means.
Are you familiar with the "please don't sneer" guideline?
I'd propose our discourse would be hobbled if we couldn't make comments like, "many people in this discussion have misconception X". But perhaps "very wrong mental model" was too many superlatives and "misunderstanding" would've been sufficient.
The guy stole billions from average people AND big time investors (he pissed on both buckets), he then proceeded to make such dumb mistakes that make him seem like it has a borderline mental issue, he also happens to be an absolute zero for charisma. How do you expect someone to sympathize with him, honestly?
What would you like to happen then?
He's not, and the perception that he is comes from a misunderstanding of the systems involved, which is why the descriptions of how this is supposedly special treatment or surprising tend to include as the foundation multiple layers of wrong assumptions about how bail works in general.
Do any of them deserve it?
This really seems to me like a Thursday in the criminal justice system, with every single step being scrutinized and cast into the worst possible light.
https://www.yahoo.com/entertainment/judge-sbf-case-recuses-h...
He "stinks of corruption" in part because he's Jewish? How am I meant to interpret this as anything other than bigotry?
This is wrong, a signed surety bond is not collateral, its a binding commitment to liability. Security/collateral for that liability is a separate thing, abd the only security provided is the house.
OTOH, federal law allows fully unsecured, personal bond of the accused if the jidge thinks it is sufficient, so having any security or surety (where this agreement has both) is optional, so really this just seems to be a bunch of people who don’t know how federal bail works being shocked not by something out of norms, but because their understanding of the norms is inaccurate.
Thanks for the detail. I wasn't sure if the "bonds in lesser amounts" were clearly just signed promises to pay, or might also include additional property bonds. It's the "lesser amounts" that confuses me. Does this mean that the additional signer(s) would not actually be responsible for the full $250M if both Sam and his parents were to flee? If so, this would seem to imply that the court has decided that Sam and his parents have non-tainted assets worth more than $250M, which doesn't match the story we've heard so far.
What I think it actually implies is that the surety given is a condition described by 18 USC § 3142(c)(1)(B)(xiv) and not 18 USC § 3142(c)(1)(B)(xii), and that people forget that (i)-(xiii) are examples of options, but do not limit the discretion provided by (xiv).
Unpacking that, (xii) says that "such surety shall have a net worth which shall have sufficient unencumbered value to pay the amount of the bail bond", while (xiv) says that they can instead "satisfy any other condition".
Does this mean that in your interpretation the headline $250M bail bond number is indeed nominal, and likely no one was required to show that they can actually afford to pay this amount? That if Sam does flee, the court accepts that it will likely collect less than this amount from the signees? And that bail could have just as easily been set at $1B, or $1T with no difference to the court as to his parents' ability to sign for it?
(I added an edit to the thread starter mentioning your correction)
Its not nominal, it is substantive: the bail amount is itself a financial condition—the penalty assessed for flight.
Requiring sureties (people who agree to be liable in the event of flight, for the full amount—his parents—or a partial amount—the other sureties—with a process that allows default judgement on prosecution request and irrevocably designates the court as the sureties agent for process, with only what amount to courtesy copies of any notices sent to the surety themselves at the last know address) is a separate substantive condition.
Asset qualification of sureties has a purpose, especially for arms-length sureties, but it is not what makes the bail not-nominal.
> That if Sam does flee, the court accepts that it will likely collect less than this amount from the signees?
I... would not interpret it this way. What I would say is that the court probably expects that the signees so not have nontainted assets sufficient to pay the bail.
However, should SBF effectively flee justice, that would mean the any criminal forfeiture would be avoided or indefinitely delayed, but evading the ability of the US government, when motivated, to enforce a default judgement may be... somewhat more difficult.
(Furthermore, I suspect if any of the involved parties were to be seen to start moving assets to facilitate that—and I would bet there is more than a little attention on that—there would be uncomfortable conversations and prosecution motions to amend bail conditions, at best.)
Almost like there is a reason this is partially secured, not personal (there are additional sureties), and comes with extensive non-financial conditions.
And judge, don’t forget, Mr. SBF voluntarily waived extradition.
But that's not what courts are trying to do with bail, so when you have a bond that isn't from a bail agent, the model that is tolerably-incorrect in the bail agent case becomes wildly inapplicable.
It becomes an IOU if he skips on his court appearance, no? That is, the potential penalty here is an IOU. (You have even described it as a "promise to pay" earlier: https://news.ycombinator.com/item?id=34100971 ) Yes, if he shows up to court, no one pays $250M and everything is great. We are talking about the penalty if he skips. No one has deposited $250M with the courts to be returned when SBF shows up for trial. If he does skips on his court appearance, I find it difficult to believe that anyone will successfully recover anything like $250M from SBF and parents. Which begs the question of what the point of a $250M figure is.
The rest of your comment is just not responsive to my comment? You have replied to several of my comments talking about people in the abstract having "misconceptions" around bail agents, and these responses are wholly unrelated to my remarks, which do not mention bail agents at all and are not about bail agents. So I would appreciate it if you would respond with more specific arguments and leave out the fluff.
> 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.