Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, has been ordered to jail by a New York judge.
According to a report by MacKenzie Sigalos for CNBC, this decision came after federal prosecutors accused him of tampering with witnesses, leading to the revocation of his bail. The judge’s decision means that unless an appeal overturns this ruling, Bankman-Fried will remain incarcerated until the commencement of his criminal trial on October 2nd.
Evidence suggesting that Bankman-Fried had attempted to interfere with witnesses on multiple occasions influenced the judge’s decision. The scene in the courtroom was tense, with Bankman-Fried’s parents present, visibly distressed by the unfolding events.
Since his arrest in December, Bankman-Fried had been under house arrest at his parents’ home in Palo Alto, California, after posting a staggering $250 million bail. His bail conditions have been a point of contention, especially concerning his interactions with the media. The Justice Department has expressed concerns over what they describe as Bankman-Fried’s “pattern of witness tampering and evading his bail conditions.”
The defense argued that Bankman-Fried’s interactions with the press were within his First Amendment rights, asserting that he hadn’t breached any bail conditions. However, the prosecution presented evidence of extensive communication between Bankman-Fried and the media, including over 100 emails and more than 1,000 phone calls. A significant point of contention was the alleged leak of private diary entries of his ex-girlfriend, Caroline Ellison, to the New York Times. Ellison, previously the CEO of Bankman-Fried’s now-defunct crypto hedge fund Alameda Research, had pled guilty to federal charges in December 2022. She has since been cooperating with the government and is anticipated to be a pivotal witness in the upcoming trial.
The prosecution’s stance is that Bankman-Fried’s actions, especially the leak concerning Ellison, were deliberate attempts to undermine and intimidate a key witness through media channels. This argument resonated with the judge, who believed there was enough evidence to suggest witness tampering.
Bankman-Fried’s legal troubles stem from multiple charges, including wire and securities fraud, all linked to alleged fraudulent activities surrounding FTX. The case has seen several developments, with charges being adjusted to align with an extradition agreement from The Bahamas, where Bankman-Fried was initially held.