ftxfiasco

Though FTX Founder Sam Bankman-Fried was unable to get bail in the Bahamas, he secured a hefty $250 million bail in New York, which was described as “the largest-ever pretrial bond.”

When he went to court last week in the Bahamas, a judge feared he could flee the country and denied him bail as he was ordered to jail at the Bahamas Department of Corrections. But when he was extradited to New York, a US judge easily granted him bail, which was surprising considering the billions of dollars lost on his platform and the alleged funneling of money from FTX to his sister company.

The former billionaire previously stated in a media interview that he only had $100,000 left in his bank account after filing bankruptcy on his $32 billion crypto exchange, FTX. So when he was released on a $250 million bond, many were surprised.

What are the terms of Sam Bankman-Fried’s bail?

• Judge Gabriel Gorenstein said Bankman-Fried would be released to his parents’ home in California with “strict” supervision.
• He was released on a ‘recognizance bail’ which means he signed a commitment to return to court on Jan 3, when he will enter his plea of ‘guilty’ or ‘not guilty’ and be arraigned.
• The ‘personal recognizance bond’ is based on Bankman-Fried’s promise with his parents’ promise to pay $250 million if he fails to show up for court.
• His parent’s home, reportedly worth $4 million, was put up as equity, with their signatures along with two other people with “considerable” assets.
• Bankman-Fried wears an electronic monitoring bracelet.
• He must submit to mental health counseling.
• The 30-year-old can only travel within and between the Northern District of California and the Southern and Eastern Districts of New York.
• He can not open any new lines of credit of more than $1,000 while awaiting trial.

Unprecedented

Bankman-Fried did not have to pay any cash, but a simple commitment made him a free man. Typically, defendants on bond are charged 10-15 percent of the bail in cash or must commit to collateral in the full amount of the bond and if he or she fails to show up to court, the pledged collateral is forfeited.

Photo credit: Epoch Times

The Sam Bankman-Fried saga is getting worse and he is now facing a slew of charges in the US after his arrest and a request for extradition was filed in the Bahamas. His criminal charges range from fraud to money laundering while the Bahamas conducts its own investigations after the implosion of FTX, the world’s second-largest crypto exchange.

But before he is extradited, Bankman-Fried must appear before a Bahamas court for proceedings and waive his rights to be extradited.

What is extradition and what is the agreement between the Bahamas and the US?

Extradition is when one country hands over a suspect to face trial for alleged crimes.

It is a process and the circumstances were established by a treaty signed in 1990.

Whenever the US wants to put a suspect before its court, its prosecutors ask the Bahamas government.

The suspect is sent to a Bahamas court where the judge examines the request made and is convinced that the suspect is indeed wanted by the USA.

What is Sam Bankman-Fried Accused of?

Eight charges were levied against the 30-year-old crypto genius: 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 violation of campaign finance laws.

Before the charges were filed, Bankman-Fried denied he defrauded investors in media interviews and chalked up losses to accounting errors.

But today, a South District New York Court stated that he defrauded investors in “good old fashion embezzlement,” and described it as “a house of cards” that crumbled. Customers lost $8 billion said Gretchen Lowe of the Commodity Futures Trading Commission.

Bankman-Fried plans to put up a fight to avoid extradition by not waiving his rights.

If Bankman-Fried had waived his rights or agreed to the extradition, the Bahamas would have been able to immediately extradite him.

His rejection on Tuesday may delay the extradition but his attempts, most likely, won’t be successful.

It’s unknown now how quickly the extradition would happen.

His next extradition hearing is scheduled for February 8, 2023.

Following the rapid collapse of crypto giant FTX and its founder Sam Bankman Fried’s questionable handling of millions of dollars of customer funds, Attorney General and Minister of Legal Affairs, Ryan Pinder sought to defend the Bahamas which is caught up in the middle of the fiasco.

“The Bahamas is a place of laws. The rule of law, and the exercise of due process, characterize the integrity of our jurisdiction.”

The Bahamas has hosted FTX’s headquarters since 2021 and when allegations surfaced that Bankman-Freid was engaged in unscrupulous financial dealings, many questioned how the country would execute its laws in regard to the exchange and its founder, who stepped down from the troubled company.

“The Securities Commission, Financial Intelligence Unit, and the Financial Crimes Unit of the Royal Bahamas Police Force will continue to investigate the facts and circumstances regarding FTX’s insolvency crisis, and any potential violations of Bahamian law.

“They will hold accountable any responsible companies and individuals, and act in cooperation with other regulatory agencies and law enforcement bodies, both here in the Bahamas, and in other countries affected,” Pinder said on Sunday night in a televised national address.

Bankman-Fried has since retweeted Pinder’s 23-minute remarks, which mostly recapped the fiasco.

Pinder’s speech was prerecorded which meant journalists could not ask questions.

As Pinder concluded, he said, “while new facts emerge every day, there is still much to discover.”

Pinder suggested that the Bahamas should not be entirely blamed for the fiasco as it is a complex matter.

“Any attempt to lay the entirety of this debacle at the feet of the Bahamas, because FTX is headquartered here, would be a gross oversimplification of reality,” he said.

“And it is deeply misguided to conclude that reluctance to communicate the details of an active investigation means that nothing is happening.”

It remains to be seen what actions if any, the Bahamas will take.