Sam Bankman-Fried’s Bail Terms Criticized as ‘Ludicrous’ by Securities Lawyer and Founder of Ludlow Street Advisors

Sam Bankman-Fried's Bail Terms Criticized as 'Ludicrous' by Securities Lawyer and Founder of Ludlow Street Advisors

Federal prosecutors have requested to change the bail terms of cryptocurrency executive Sam Bankman-Fried, according to a CoinDesk report. Bankman-Fried, the founder of crypto exchange FTX, was arrested in December on charges of “a global scheme to deceive and defraud customers and lenders,” and was released on a $250 million bond co-signed by his parents, who put their home in Palo Alto as collateral.

However, securities lawyer and founder of Ludlow Street Advisors James Murphy recently criticized the terms of Bankman-Fried’s bond, calling them “ludicrous.” He argued that there was no real money used for the bond and that it was only a promise of payment should Bankman-Fried flee the country. Murphy also questioned the ability of Bankman-Fried’s parents to pay the bond in full if needed.

Now, federal prosecutors have asked to change Bankman-Fried’s bail conditions to prohibit him from using his cell phone and accessing the internet except under certain circumstances. This request came as a surprise to some, as it was not part of the original bail agreement. Murphy expressed confusion at the continued leniency towards Bankman-Fried, who he claimed was “pushing the envelope” in terms of what he could do.

However, Anthony Michael Sabino, co-founder of law firm Sabino & Sabino P.C. and a professor of law at St. John’s University, argued that the bond was high because of the risk of Bankman-Fried fleeing the jurisdiction. While he acknowledged that there was no money put up front for the bond, Sabino claimed that it was common for bond issuers to take on further risks.

Bankman-Fried’s bail co-signers, Andreas Paepcke and Larry Kramer, were also named by Judge Lewis Caplan of the Southern District of New York. Paepcke, a senior research scientist at Stanford University, agreed to pay $200,000, while Kramer, a former dean of the university’s law school, agreed to pay $500,000. Both would only have to pay if Bankman-Fried skipped town, according to Murphy.

Bankman-Fried is known for his political connections and resources, which have led to concerns that he could potentially flee outside the US. Sabino noted that the charges against Bankman-Fried were not violent crimes, which tend to be more lenient in the justice system.

Bankman-Fried’s case has been closely watched in the cryptocurrency industry, and the potential changes to his bail conditions could have significant implications for the sector.

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Kristina Knight-1
Kristina Knight, Journalist , BA
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Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with BizReport.com, NBC News, Soaps.com, DisasterNewsNetwork, and many more publications.