Sam Bankman-Fried had to have his parents and an unknown third-party sign a $250 million bond. In the media, it has been widely reported that this is "secured" by the parents' house, which is worth far less than $250 million, and is almost certainly worth less than $25 million which seems to be another magic number for bail bonds in this court. The most detailed article I could find on the mechanics was this one but I'm hoping a lawyer here could actually clarify the situation.
Does 10% collateral mean that the parents and the third-party person are literally taking a loan out against the house and issuing the court a check for $25 million? In the media, they have mostly been saying that the house is being put up as collateral, which doesn't imply to me that this is the case.
In the case where he skips bail, the parents and this other person are on the hook for $250 million. If the house is being used as collateral, wouldn't this imply that all of their assets are collateral, and so the house specifically being collateral is irrelevant?
Does the court assess the creditworthiness of the people signing the bond, to ensure that they actually have $250 million to pay?
Only a couple hours after asking this, I saw this article that seems to resolve my question if accurate. Their summary is that my confusion was well warranted, it's literally just that they committed a $4m as "collateral" that's forfeit if he doesn't show up, and a promise to pay the full amount.
Edit: additional interesting discussion on HackerNews
This website is a place for people who want to move past shady thinking and test their ideas in a
court of people who don't all share the same biases. Our goal is to
optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.
The weekly Culture War threads host the most
controversial topics and are the most visible aspect of The Motte. However, many other topics are
appropriate here. We encourage people to post anything related to science, politics, or philosophy;
if in doubt, post!
Check out The Vault for an archive of old quality posts.
You are encouraged to crosspost these elsewhere.
Why are you called The Motte?
A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently,
it's an element in a rhetorical move called a "Motte-and-Bailey",
originally identified by
philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial
but high value claim to a defensible but less exciting one upon any resistance to the former. He likens
this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for
the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired
propositions to which one retreats when hard pressed."
On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.
New post guidelines
If you're posting something that isn't related to the culture war, we encourage you to post a thread for it.
A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts
such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a
submission statement. A submission statement is required for non-text sources (videos, podcasts, images).
Culture war posts go in the culture war thread; all links must either include a submission statement or
significant commentary. Bare links without those will be removed.
Jump in the discussion.
No email address required.
Notes -
Sam Bankman-Fried had to have his parents and an unknown third-party sign a $250 million bond. In the media, it has been widely reported that this is "secured" by the parents' house, which is worth far less than $250 million, and is almost certainly worth less than $25 million which seems to be another magic number for bail bonds in this court. The most detailed article I could find on the mechanics was this one but I'm hoping a lawyer here could actually clarify the situation.
Does 10% collateral mean that the parents and the third-party person are literally taking a loan out against the house and issuing the court a check for $25 million? In the media, they have mostly been saying that the house is being put up as collateral, which doesn't imply to me that this is the case.
In the case where he skips bail, the parents and this other person are on the hook for $250 million. If the house is being used as collateral, wouldn't this imply that all of their assets are collateral, and so the house specifically being collateral is irrelevant?
Does the court assess the creditworthiness of the people signing the bond, to ensure that they actually have $250 million to pay?
Only a couple hours after asking this, I saw this article that seems to resolve my question if accurate. Their summary is that my confusion was well warranted, it's literally just that they committed a $4m as "collateral" that's forfeit if he doesn't show up, and a promise to pay the full amount.
Edit: additional interesting discussion on HackerNews
More options
Context Copy link
More options
Context Copy link