PANews integrated from decrypt, CNBC
On December 23, New York judge Gabriel W. Gorenstein approved FTX founder SBF's bail of $250 million and notified SBF that his next court appearance would be January 3, 2023.
As soon as this news came out, the encryption community was in an uproar—yes, where did this huge bail come from? Didn't SBF lose billions of dollars? Does he still have FTX funds?
In fact, at least so far, no one has paid anything for SBF's bail, and no cash has been given. In fact, the SBF's bail agreement is an "appearance bond" that promises to abide by certain restrictions while awaiting trial and to appear in court when the time comes.
Thus, $250 million was an appearance bond filed with the U.S. court and secured by four individuals, at least one of whom was not a family member of SBF. However, at the time of writing, only two people have signed on to this "Guaranteed Deposit Agreement", namely SBF's father, Allan Joseph Bankman, and his mother, Barbara Fried. There are also rumors that two people with "substantial" assets are also here. signed the guarantee. According to the U.S. federal prosecutor's disclosure at the New York hearing, the bail has set the "highest pre-trial bail ever" in the United States.
According to the analysis of a legal expert who did not want to be named, according to US law, "guarantee" does not need to pay in advance, nor does it need to arrange bail. It is just a written promise based on the defendant's appearance in court when needed. So as long as there is a bond, the SBF can be released, which means that the SBF "skips" the actual bail process.
However, SBF also has a greater risk in doing so, because when a relative or family member signs a guarantee bond, once he violates the guarantee restrictions, or fails to appear in court as required by the court, it will affect others, including the co-signer who assumes the bond.
According to a screenshot of the bail agreement that leaked out, SBF's restraint restrictions include the requirement to wear an electronic monitoring bracelet, house arrest at his parents' home in California, and restrictions on spending, attending commercial activities and carrying guns.
If SBF did not comply, or fail to appear in court, a bond payment would be triggered, and the first collateral in liquidation was SBF's parents' Palo Alto property. While the exact value of SBF's parents' Silicon Valley real estate isn't listed in court documents, it's roughly $4 million, according to Zillow, a real estate brokerage site.
The question is, $4 million is a drop in the bucket for a $250 million guarantee, and where will SBF's surety signatories (including his parents) come up with the rest? SBF parents and FTX executives have bought $300 million worth of real estate in the Bahamas over the past two years, according to Reuters, but so far no one knows who is hosting the assets.
Before walking out of the court, the judge asked SBF whether he understood the consequences of violating the bail agreement. At this time, the once-powerful encryption tycoon said a word:
"Yes, I understand. (Yes, I do)"
