Court keeps secret for now who backed bail for FTX's Bankman-Fried
The names of wealthy backers who guaranteed a $250 million bail bond for indicted former FTX CEO Sam Bankman-Fried will remain a secret — for now.
On Tuesday, Bankman-Fried's lawyers filed court documents indicating their plan to appeal a Manhattan district court judge's January 30 decision to unseal the names. They are asking that the matter be decided by the Second Circuit Court of Appeals.
The request to make the names public was made by a group of news organizations that contend the public has a right to the information.
The guarantors made it possible for the former crypto CEO to post the $25 million in assets required to stay out of custody while he awaits trial.
U.S. District Court Judge Lewis Kaplan previously ordered unsealing to take place on Tuesday based on his expectation that the guarantors, known as bail sureties, were less likely to face the same level of scrutiny and harassment that Bankman-Fried's parents allegedly received, and given that such information is typically made public.
Judge Kaplan said the issue, if appealed, would be paused by the district court until 5 p.m. on February 14, so that any adversely affected party could request a stay from the Second Circuit.
Before the full details of the bail arrangement were made public, court documents showed that the bond was secured by a $4 million home owned by Bankman-Fried’s parents as well as two individuals.
Prior to the district court's ruling, attorneys for Bankman-Fried argued that the guarantors' identities should remain private to ensure their safety and to protect them from harassment.
“In recent weeks, Mr. Bankman-Fried’s parents have become the target of intense media scrutiny, harassment, and threats. Among other things, Mr. Bankman-Fried’s parents have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm,” Mark Cohen, Bankman-Fried's lawyer, argued that the other co-signers, if publicly identified, could face similar consequences.
In December, the U.S. Justice Department charged Bankman-Fried with multiple felonies, including wire fraud, securities and commodities fraud, money laundering, and campaign finance violations, claiming he illegally used FTX customer and investor funds.
Convictions on all eight of Bankman-Fried’s charges together carry up to 115 years in prison.
Separately, the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission filed civil suits against the former crypto mogul, FTX.com, and Alameda Research.
The right to bail is governed by the U.S. Constitution’s 8th Amendment, which prohibits excessive bail. In setting bail conditions, a judge is tasked with ensuring public safety and that the defendant will show up in court to face charges.
To guard against a defendant’s flight risk, a judge can impose financial and other consequences that trigger if a defendant flees prosecution. In Bankman-Fried’s case, the judge also required that the former billionaire remain on home confinement with limited local travel, wear an ankle monitor, surrender his passport, and refrain from financial transactions exceeding $1,000.
Typically, a defendant must pledge assets equal to around 10% of the bond amount. In Bankman-Fried’s case, his $250 million bond means that he was required to pledge assets totalling about $25 million.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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