On December 22, disgraced FTX founder Sam Bankman-Fried (SBF) was arraigned in a New York City Federal courtroom on charges of conspiracy to commit wire fraud and money laundering. His court appearance came roughly 24 hours after being extradited from the Bahamas courtesy of the United States Marshals Service and a government-supplied private jet.
As the court hearing was live-Tweeted, the world was gobsmocked when the judge set SBF's bail at…
$250 million
That amount is believed to be the largest pre-trial bail in US legal history. For perspective, Bernie Madoff's bail back in 2008 was $10 million.
And let's all recall that there was a time not long ago when a quarter billion dollars would have been essentially a really bad parking ticket to Sam Bankman-Fried. Before the collapse of his crypto empire, his net worth peaked at $25 billion. That peak net worth was achieved in January 2022 after FTX raised $400 million in venture capital at a valuation of $32 billion. Even after crypto markets tanked throughout 2022, Sam's net worth was still roughly $15 billion immediately before his difficult-to-fathom fall from grace.
As you know, SBF's empire was totally vanquished in less than 12 hours on November 7.
In the aftermath, according to SBF himself, he was left with less than $100,000 to his name.
So you can understand the world's further gobsmacked-ness when somehow SBF was able to MAKE A QUARTER-BILLION-DOLLAR BAIL.
How? Who? Where? What? How does a guy who is sitting in rubble of a destroyed and indicted empire, under all the scrutiny the world, with less than $100k to his name… afford a $250 million bail?!?!
The short answer: With a little help from his parents and two mysterious other individuals. Who are those two mystery benefactors? Sam really doesn't want you to know…
(Photo by David Dee Delgado/Getty Images)
Who Paid SBF's Bail?
Technically speaking, Sam was released on a $250 million "personal recognizance" bond that was secured by assets pledged by four individuals. No money physically changes hands, not even a customary 10-15% of the total bail amount that you maybe have seen in movies and TV shows.
However, if Sam is a no-show at any future required court or sentencing date, the four co-signers of his bond will be on the hook for the full $250 million.
We know two of the individual co-signers are Sam's parents Joseph Bankman and Barbara Fried. The Bankman-Frieds pledged their $4 million home in Palo Alto, California for the bond. The home is a block from Stanford's campus, where they both worked as professors until recently when they had to take the semester off to deal with their son's mess.
We still do not know the identity of the other two individuals. And if Sam has his way, we may never know their identity.
On Tuesday morning, lawyers for SBF formally requested that the identities of the two other co-signers remain redacted. In justifying their request, the lawyers claimed that Sam's parents "have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm."
Therefore they worry the other two individuals would suffer equally:
"Consequently, there is serious cause for concern that the two additional sureties would face similar intrusions on their privacy as well as threats and harassment if their names appear unredacted on their bonds or their identities are otherwise publicly disclosed."
Since the government had "no position on the request," Judge Kaplan granted SBF's wish to keep his two mysterious benefactors anonymous.
Speculation has run wild trying to identify who these benefactors may be. What person with extreme wealth out there would be willing to put their neck on the line for a guy who allegedly ran what may prove to be one of the biggest frauds of all time?
Some have speculated hedge fund billionaire/crypto-champion Bill Ackman.
Others have claimed that Sam may still have enough industry dirt to inspire two extremely rich crypto investors to step up for him.
Sarcastically, some have also guessed Larry David, Steph Curry, Tom Brady or any of the celebrities who endorsed FTX over the years may have ponied up some cash to keep him quiet.
Or maybe Sam himself still has a stash of hidden treasure overseas and is using a straw-man to act on his behalf?
The world may never know… but hopefully we do find out at some point 🙂
