- FTX Founder Sam Bankman-Fried is headed to jail following a federal judge’s decision to revoke his bail, alleging witness tampering, which marks a significant development in the legal proceedings against him.
- Bankman-Fried’s interactions with the media, including emails and phone calls, led to allegations of tampering with witnesses and evading bail conditions. The tipping point was his alleged leak of private diary entries belonging to his ex-girlfriend, a key prosecution witness.
- Despite objections from the press, the judge’s ruling emphasized the probable cause of witness tampering and led to Bankman-Fried’s immediate detainment. The legal proceedings continue as the government plans to file a new superseding indictment, underscoring the case’s complexities and the charges’ evolving nature.
In a significant legal development, Sam Bankman-Fried, the founder of FTX, is set to be incarcerated after a federal judge approved a request from prosecutors to revoke his bail on charges of alleged witness tampering. Bankman-Fried was taken into custody immediately following a court hearing in New York.
Denial of Delayed Detention Pending Appeal
Judge Lewis Kaplan rejected Bankman-Fried’s plea for delayed detention while awaiting an appeal. Unless the appeal succeeds, he will remain in custody until his criminal trial is scheduled for October 2. Judge Kaplan stated,
“My conclusion is there is probable cause to believe the defendant tried to tamper with witnesses at least twice.”
Judge Kaplan
Investigation Context and Witness Tampering Allegations
Bankman-Fried’s arrest in December prompted a series of pre-trial hearings related to his interactions with the media, which the Justice Department characterizes as a “pattern of witness tampering and evading his bail conditions.” Despite objections from members of the press, Bankman-Fried’s detainment was approved due to concerns over witness intimidation through media conversations.
Courtroom Scene and Immediate Detainment
As Bankman-Fried was taken into custody at the conclusion of the hearing, he removed his blazer, tie, emptied his pockets, and appeared to remove his shoes. His parents were in the gallery, with his mother displaying visible distress during Judge Kaplan’s ruling.
Strategic Jail Location and Legal Proceedings
The government requested Bankman-Fried’s detainment in Putnam, New York, to provide him access to a laptop with internet capabilities for defence preparations. This strategy contrasts with sending him to Brooklyn’s Metropolitan Detention Center, which offers limited internet access for prisoners. While Bankman-Fried had been out on a $250 million bail package, the judge’s decision shifted him from his parents’ Palo Alto, California house to custody.
Witness Tampering Allegations and Press Interactions
The government cited Bankman-Fried’s extensive communication with the media, including over 100 emails and more than 1,000 phone calls to journalists, as a primary concern. The tipping point was his alleged leak of private diary entries belonging to his ex-girlfriend, Caroline Ellison, to The New York Times. Ellison, who previously served as the CEO of Bankman-Fried’s crypto hedge fund, Alameda Research, has been cooperating with the government and is expected to be a key witness in the prosecution.
Judge’s Rationale and Jail Decision
Judge Kaplan’s ruling centred on the prosecution’s assertion that Bankman-Fried’s involvement in the Ellison story aimed to discredit and harm a witness. The judge highlighted the defendant’s shift from online interactions to in-person actions to circumvent conditions limiting internet and phone usage. The prosecution demonstrated that Bankman-Fried had multiple lengthy phone calls with one of the authors of the Times story prior to its publication, contributing to the case of indirect witness intimidation through the press.
Continuing Legal Proceedings and Future Developments
The prosecution, adhering to an extradition agreement with The Bahamas, where Bankman-Fried was previously held in custody, has had to revise charges twice. They have announced plans to file a new superseding indictment next week, further escalating the legal proceedings in this high-profile case.
Source: Bloomberg
