Former FTX CEO Sam Bankman-Fried ordered to jail after judge revokes his bail
Background
Sam Bankman-Fried, the former CEO of cryptocurrency exchange FTX, was ordered to jail on Friday after a judge revoked his bail. Bankman-Fried had been living under house arrest at his parents’ home in Palo Alto, California, after posting a staggering $250 million bond. The disgraced crypto mogul was awaiting trial, set to begin on October 2, after being charged by the U.S. government last year for allegedly orchestrating one of the largest financial frauds in history. If convicted, Bankman-Fried could face a lifetime in jail.
Witness Tampering Allegations
Government prosecutors sought to revoke Bankman-Fried’s bail and have him sent to jail until his trial, accusing him of witness tampering. The allegations centered around a claim that Bankman-Fried leaked private diary entries of his former girlfriend, Caroline Ellison, to The New York Times. Ellison, the former head of Alameda Research, a hedge fund co-founded by Bankman-Fried, had pleaded guilty to fraud charges and was likely to testify against him in court.
Judge’s Decision
On Friday, U.S. District Court Judge Lewis Kaplan sided with prosecutors and ordered Bankman-Fried’s detention. Judge Kaplan stated that there was probable cause to believe that the defendant had attempted to tamper with witnesses at least twice. The judge accused Bankman-Fried of trying to intimidate witnesses and taint the jury pool. Bankman-Fried’s lawyers have appealed the decision.
Leak of Ellison’s Diary
The alleged leak of Ellison’s diary, which contained reflections on her relationship with Bankman-Fried and some professional misgivings, was the final straw for prosecutors. Hours after The New York Times posted an article based on the leaked diary entries, the prosecution filed a formal request with the judge to modify Bankman-Fried’s bail terms. They argued that the leak was an attempt to portray Ellison, a key cooperator, in a negative light and to intimidate and corruptly influence her testimony. Prosecutors claimed this was part of a pattern of Bankman-Fried flouting the terms of his bail agreement, including talking to other media.
Media Interactions
Prosecutors highlighted the numerous conversations Bankman-Fried had with reporters since being charged. They stated that he had participated in over 1,000 phone calls with journalists, including more than 500 with author Michael Lewis, who is writing a book about Bankman-Fried. Bankman-Fried’s attorneys argued against his detention on First Amendment grounds. The New York Times Company and the Reporters Committee for Freedom of the Press also expressed concerns that jailing Bankman-Fried could have a chilling effect on free speech.
Defense Challenges
Bankman-Fried’s lawyers argued that his detention would hinder his ability to defend himself against the government charges. They pointed out the vast amount of material they needed to confer on with their client. Last month, Judge Kaplan had imposed a temporary gag order on Bankman-Fried as he deliberated on the witness tampering accusations.
Conclusion
Former FTX CEO Sam Bankman-Fried has been ordered to jail after a judge revoked his bail. The decision came after allegations of witness tampering, specifically the leak of private diary entries belonging to Bankman-Fried’s former girlfriend, who was likely to testify against him in court. Bankman-Fried’s lawyers have appealed the decision, arguing against his detention on First Amendment grounds. The case raises concerns about the potential impact on free speech and the challenges Bankman-Fried may face in defending himself against the government charges.