Sam Bankman-Fried has allegedly commingled customer funds between FTX and Alameda Research. The United States Attorney of the Southern District of New York charged him with two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering. Bankman-Fried could possibly face a life sentence if found guilty.

What lead to his arrest and what are the next steps in his trial? Let’s recap what happened to SBF in the last few weeks.

Bankman-Fried agreed on his extradition

SBF was arrested two weeks ago in the Bahamas and brought to the only prison of the Bahams. According to a report of the U.S. State Department that was published in 2021, prisoners in “Foxhill” suffer from inhumane conditions. According to the report, the prison is said to be overcrowded, has insufficient sanitation and inmates have no running water.

It might have been these conditions that convinced Bankman-Fried to wave his right to dispute the extradition to the U.S. that was still in the making when he was arrested. Interestingly enough, the Bahamas reacted to a notification from U.S. authorities and arrested him before the official request was made.

It was last week when Sam Bankman-Fried was extradited to the U.S. and most of the crypto community was cheering over the fact that justices would be served. It appears that these cheers were a little bit premature.

SBF walks free on $250 million bail

When Sam Bankman-Fried got arrested in the Bahamas, the judge denied him a $250,000 bail. His remarks that SBF was at flight risk at that point in time seemed only reasonable. Back in the U.S. things are looking very different. The New York judge set him free under the condition to remain in house arrest at his parent’s house in Palo Alto.

The more pressing question is, who paid $250 million bail for him? Usually, a defendant has to post between 10%-15% of the bail that is asked. There are even bail bonds available so that defendants with less liquidity can afford bail.

However, SBF opted for a third type of bail with his lawyers and the judge agreed to it. His parents basically posted their Palo Alto home as bond. Rumor has it that the house is worth $4 million which is nowhere near the usual 10%-15% margin. This has aroused anger by many influencers, crypto media and the community. They feel that SBF got free on the mere promise to pay $250 million in case he violates the terms of his bail. Again, it is worth to pay attention to the remarks of the judge, who said that SBF is known in all civilized parts of the world and has nowhere left to run.

Caroline Ellison pleads guilty

Caroline Ellison, former CEO of Alameda Research has taken a plea agreement along with Garry Wang. Both wave their right to defend themselves and plead guilty to 7 charges of which 5 carry a maximum penalty of 20 years in jail. Additional charges have been pressed against Ellison and Wang by the SEC and the CFTC. The plea agreement is only valid for the case that is brought against them by the SDNY attorney.

In return, they are expected to be given a mild sentence and have to return any money that they made from defrauding investors. The move comes to no surprise since the SDNY attorney corners Sam Bankman-Fried with the guilty pleas. Of course, SBF still has to face trail and will get the chance to defend himself, but it is expected that the evidence against him will be overwhelming. It will be interesting to watch how his lawyers will prepare his defense. Some expect him to fight the charges head-on, while others speculate that SBF could opt to plead guilty even though he might not be able to work out a deal with the U.S. attorney.