After Sam Bankman-Fried was released on $250 million bail on Thursday, the crypto community is wondering about the turn of events. The collapse of FTX, Alameda Research and affiliates has sent the crypto exchange plummeting from a $32 billion valuation to $1 billion in a matter of days.
The negative effects of the FTX-related contagion and liquidity crisis are still playing out in the market. In this context, traders are waiting for some clarity around the return of funds in the ongoing bankruptcy process.
Meanwhile, the crypto community is wondering if Sam Bankman-Fried continues to have access to FTX user funds. Speculation around the user funds was sparked after news of the $250 million bailout coming to the former FTX CEO’s rescue. However, a New York judge released Sam Bankman-Fried on personal bond, backed by a guarantee from his parents.
Explanation: What was SBF’s bail based on?
Defendant’s agreement involved a $250 million bond secured by Sam Bankman-Fried’s parents’ home in Palo Alto, California. Allan Bankman and Barbara Fried were named as owners of the bond in the bond. This means that Sam Bankman-Fried’s parents will have to relinquish ownership of their Palo Alto home if the agreement is broken. The bond will be considered lost in the event that Sam Bankman-Fried :
- fails to appear at the court proceedings
- does not comply with the various conditions OR
- is convicted of a crime.
Meanwhile, Steven McClurg, co-founder of Valkyrie Funds, wonders how Sam Bankman-Fried’s parents could have put up their house as collateral.
So @SBF_FTX parents, who bought a home in Bahamas with stolen FTX funds, will use their other home as collateral on the $250mm lease?
– Steven McClurg (@stevenmcclurg) December 22, 2022
The court document clearly states that,
“The court may immediately order the return of the bond amount to the United States, including the bond security, if the defendant fails to comply with the agreement.”