FTX Founder Sam Bankman-Fried’s Bail Revoked as Judge Cites Witness Tampering

In a dramatic turn of events, United States District Judge Lewis Kaplan has revoked the bail of Sam Bankman-Fried, the indicted founder of the now-defunct FTX cryptocurrency exchange. The decision comes after probable cause was found that Bankman-Fried had tampered with witnesses on at least two occasions. This development could significantly impact the former billionaire’s trial preparations, as he faces charges of embezzling billions of dollars from FTX customers to cover losses at his Alameda Research hedge fund. Bankman-Fried had maintained his innocence and was previously under house arrest at his parents’ residence.

The bail revocation decision was announced during a hearing in federal court in Manhattan on Friday, just weeks before Bankman-Fried’s scheduled fraud trial in October. Rejecting a plea from the defense to delay the detention pending appeal, Judge Kaplan deemed that the defendant’s actions required stricter measures.

The key issue leading to this decision was the alleged sharing of personal writings belonging to Caroline Ellison, a former romantic partner and the former CEO of Alameda Research. Prosecutors argued that Bankman-Fried had crossed ethical boundaries by sharing these writings with a New York Times reporter. This act of witness tampering was particularly concerning to the court as it was done during an in-person meeting at the defendant’s parents’ home, where his internet and telephone activities were supposed to be monitored under his bail conditions.

“It was a way, in his view, of doing this in a manner in which he was least likely to be caught,” noted Judge Kaplan, suggesting that Bankman-Fried was attempting to evade surveillance. The prosecution insisted that the act was not about protecting his reputation but rather about obstructing the ongoing investigation.

The defendant’s legal team countered, asserting that Bankman-Fried’s intent was to uphold his reputation and exercise his right to communicate with the media. Nevertheless, the judge deemed the tampering allegations credible and ordered the revocation of bail.

Caroline Ellison, along with two other former associates from Bankman-Fried’s inner circle, have already pleaded guilty to fraud charges and are cooperating with the US Attorney’s Office in Manhattan. Ellison’s expected testimony against Bankman-Fried during the upcoming trial has added weight to the prosecution’s case.

Following the bail revocation, Bankman-Fried was led out of the courtroom by US Marshals, handcuffed and stripped of his shoelaces, jacket, tie, and personal belongings. His parents, both law professors at Stanford University, were visibly emotional during this turn of events.

The defense team’s request to relax the gag order that prevented Bankman-Fried from discussing his case publicly was not granted. The media has closely followed this case, with debates about the extent of the order’s appropriateness to ensure a fair trial.

While the whereabouts of Bankman-Fried’s detainment remain unclear, prosecutors have proposed that he be held at the Putnam County Correctional Facility, which would provide limited internet access for trial preparation.

Bankman-Fried’s trial, slated to begin on October 2, promises to be a pivotal moment in the world of cryptocurrency, as it delves into the alleged financial misconduct that led to the collapse of FTX and the subsequent legal battles that have unfolded.

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