The saga of Sam Bankman-Fried continues, now with the once-secret backers of his infamous bail revealed. And the backers are no ordinary blue-collar folks. No, they are part of a generational support of fellow scientists in the halls of Stanford University.
One of them is a dean, and the other an associate professor at the elite school of once-brilliant founders and tech executives. But how could two ordinary professors afford the incredible amount of $250 million worth of bail for the likes of Sam Bankman-Fried?
How is Bond Calculated and Paid?
Firstly, a judge determines the amount of bail based on factors like the severity of the crime. They then weigh the likelihood that the defendant will commit additional crimes after being released and the chances that the defendant will flee the jurisdiction before trial.
A judge may set bail at any amount that is not objectively unreasonable or deny bail altogether. The Eighth Amendment to the U.S. Constitution prohibits “excessive bail” but does not state that courts are required to allow bail.
The words “bail” and “bond” are often used almost interchangeably when discussing jail release, and while they are closely related to each other, they are not the same thing. Bail is the money Sam Bankman-Fried must pay in order to get out of jail. A bond is posted on SBF’s behalf, usually by a bail bond company, to secure his release.
Bail is not intended as a punishment in itself. It is rather a way of securing Sam Bankman-Fried’s agreement to abide by certain conditions and return to court (he was a billionaire, after all). In that sense, bail is like collateral left with the court to ensure that, after the SBF’s release from jail, he will return for the remaining parts of the criminal case. If Sam fails to appear or violates the conditions of the release, he forfeits the amount paid.
More Info on the Stanford Professors
In this case, he’d forfeit the amount of cash that his two Stanford donors put up as collateral in order to get him out in the first place. Speaking of Stanford professors, who are they? Now that we have the basics of bail and bonds down, let’s talk about the mysterious minds behind the fateful and temporary release of Sam Bankman-Fried.
According to freshly-released unredacted documents, thanks to Judge Lewis A. Kaplan’s ruling in favor of news organizations’ request to make the information public, the two guarantors behind SBF’s bond are none other than Stanford research scientist Andreas Paepcke and former Stanford Law School dean Larry Kramer.
For the record of drawing obvious connections, both SBF’s parents are professors at Stanford…
Paepcke is a senior research scientist, a Harvard University alumni focused on data analytics, whose hobbies include piano playing, subpar poem-writing, and riding his red Honda scooter to overcome a midlife crisis.
Kramer, meanwhile, served as the Stanford Law School dean from 2004 to 2012 and sits on a number of boards for nonprofit organizations, including the National Constitution Center, Independent Sector, and the ClimateWorks Foundation.
He was described as a close family friend who sympathized with the Bankman-Fried’s and was quoted by the New York Times as saying he didn’t see “how this doesn’t bankrupt them,” referring to the costly legal process that’s about to envelop SBF.
Other Terms of the Bond
As per the terms of the bond, the guarantors had to have substantial income or be “of considerable means” and couldn’t be related to SBF. Although the fraudster’s bail was to the tune of $250 million—one of the heftiest in US history—Paepcke and Kramer only agreed to the surety of $200,000 and $500,000, respectively.
So what about the rest of the money? Well, that is still not quite clear, but we can only imagine that part of it was more than likely paid for by the funds ultimately stolen from FTX and Alameda Research. I suppose that is the ultimate crux of it all, that the users are the ones that end up paying for the legal fees of the very person who stole from them.
Will we ever find justice in the curious case of FTX and Sam Bankman-Fried? Probably not, but we’ll keep reading until we do.
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