Lawyers explain why bail differs for crypto washouts SBF and Eisenberg

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In the US, state and federal bail restrictions can differ wildly and, unless there’s some reason to believe that a charged individual will hurt themselves or others or flee before their trial, federal bail conditions are usually quite reasonable.

In the case of Sam Bankman-Fried (SBF), while he’s charged with the third largest corporate fraud in history (surpassed only by Bernie Madoff and Enron), he’s also never committed another crime, was relatively easily extradited from The Bahamas, and comes from a well-connected family at Stanford University. Unfortunately, it helps to be a young, white male with an expensive team of attorneys.

Meanwhile, Avraham Eisenberg, the exploiter of the decentralized exchange Mango Markets, also faced bail hearings this month. Only, he played his cards quite differently: instead of putting up the assets of friends and family to make bail, Eisenberg waived his right to bail entirely and went directly to jail.

So, why were their bail cases treated so differently? Protos reached out to several lawyers who spoke on background to provide some answers.

Prosecutors show bail leniency for their own benefit

Rumors began to swirl when SBF was instantly able to meet an enormous bail amount: $250 million. But as more information came to light, it’s clear that SBF was never expected to pay that full amount.

If the curly-haired former billionaire were to stop showing up in court, he would only be expected to cough up a fraction of the $250 million. Indeed, the total value of assets up for grabs amount to roughly 1-2% of the bail, if market rates for SBF’s family home are generous.

In essence, the impossible-to-meet $250 million capital requirements were never placed to be met in full. However, if SBF fled it would surely force his parents, Larry Kramer, and Andreas Paepcke (the individuals who put assets up to get SBF out on bail) into extremely stormy financial straits.

What ended up being more important was what SBF had to agree to outside of the cash: an ankle bracelet monitoring his position at all times, seizure of his passport, and internet and communications monitoring.

Read more: Can Solana stay afloat without SBF and FTX?

A lawyer speaking on background told Protos that the point of bail “is to ensure the defendant shows up to trial and secondly that the community is protected.” If both of those parameters are met, there’s no reason not to grant a defendant bail.

“To me it looks like the government is simply giving him enough rope to legally hang himself,” the lawyer said.

Strong words, but they could be accurate: after SBF was found to have used a VPN to supposedly watch the Superbowl, tampered with witnesses by reaching out to multiple former FTX employees, and posted two Substack blogs declaring his innocence, the prosecution didn’t recommend SBF have his bail revoked or all internet access denied. Instead, more restrictions were requested.

“I really believe [the prosecution are] letting him out to continue to make mistakes because it could give them a leg up in plea negotiations,” the lawyer said.

Lawyers weigh in on the differences between SBF and Eisenberg

There are two competing narratives for why Eisenberg hasn’t attempted to be released on bail. One possibility is that maybe his family and friends simply couldn’t afford it, even at a rate of 1% or less, like SBF.

The other is that Eisenberg is expecting to make a plea and do two years or less in prison overall. If this is the case, he could be preemptively beginning his prison sentence while plea negotiations with the government continue. Either way, Eisenberg isn’t in a significant bind like SBF, who’s looking at over a decade in prison as a best case scenario.

One of several lawyers Protos spoke to on background said that “Eisenberg’s crime is a one-off and smaller… His case is much stronger than Bankman-Fried’s.

“The key point is conspiracy theories don’t account for the fact that different crimes and how suspects behave will alter bail conditions.”

Read more: Jump Crypto profited from Terra Luna as investors lost billions

Indeed, other lawyers Protos reached out to mentioned a few significant factors that could have played a difference in how SBF and Eisenberg were treated:

  • While both cases are crypto-related, they’re quite different.
  • The cases have separate judges with their own free-will when it comes to setting bail.
  • An unfortunate truth: some attorneys have more power and name recognition than others.

Additionally, lawyers proposed that the differences in the amount of remorse shown, or responsibility taken, could have factored in. SBF admits he “fucked up” while Eisenberg is still suggesting he deserves the Mango Market exploit funds.

However, speculation is all one can do. “At the end of the day,” said another lawyer “there isn’t any single explanation for why bail requirements may be so different.”

For anyone who’s interested in a more detailed understanding from a lawyer as to how bail works in federal court cases, Ken White has written a beautiful explainer.

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