Sam Bankman-Fried Has Bail Revoked and Heads to Prison

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  • Sam Bankman-Fried has had his bail revoked ahead of his October fraud trial following allegations of witness tampering
  • Bankman-Fried is now in custody after a federal court decision in Manhattan
  • The former CEO is accused of sharing personal writings of a former partner to discredit her testimony in the trial

Sam Bankman-Fried, the indicted founder of the defunct cryptocurrency exchange FTX, has had his bail revoked after accusations of witness tampering. Bankman-Fried surrendered to authorities yesterday after Judge Lewis Kaplan announced the bail revocation during a hearing held in federal court in Manhattan. Following the conclusion of the hearing, Bankman-Fried was immediately taken into custody by members of the US Marshals Service.

Leaking of Caroline Ellison’s Diary Backfires

Federal prosecutors in Manhattan raised eyebrows on July 26 when they unexpectedly requested Bankman-Fried’s detention, contending that he had gone beyond ethical boundaries by sharing personal writings of his former romantic partner, Caroline Ellison, with a journalist from The New York Times.

Prosecutors argued that this attempt to gain press coverage was aimed at discrediting Ellison, who is slated to provide testimony against Bankman-Fried in his scheduled trial on October 2. Bankman-Fried, 31, has pleaded not guilty to allegations of embezzling billions of dollars in customer funds from FTX to cover losses at his Alameda Research hedge fund, where Ellison once held the position of chief executive.

Ellison, along with two other former associates from Bankman-Fried’s inner circle, has already admitted guilt to charges of fraud and has agreed to cooperate with the US attorney’s office in Manhattan.

Bankman-Fried Was Exercising Free Speech, Say Lawyers

Bankman-Fried’s legal team pushed back against the prosecution’s claims, asserting that their client’s intention in sharing Ellison’s writings was to safeguard his reputation and exercise his right to speak with the press.

Judge Kaplan, however, declared that he found probable cause to believe that Bankman-Fried had attempted to tamper with witnesses on at least two occasions since his arrest in December. In response, the defense has announced plans to appeal the decision and has requested an immediate suspension of the incarceration order.

For the past months, Bankman-Fried has been residing under stringent conditions at his parents’ residence in Palo Alto, California, while on a $250 million bond. He was brought to the United States from the Bahamas, where FTX was headquartered, after his arrest in December. Prosecutors have now proposed relocating Bankman-Fried to a jail in Putnam, New York, instead of the closer Brooklyn facility. This recommendation is based on the need for improved internet access to facilitate his defense preparation, according to sources.

Issue Shines Spotlight on Accused’s Rights

In the July 26 hearing, Judge Kaplan imposed a restriction on Bankman-Fried’s ability to discuss his case publicly. The court requested both the prosecution and defense to present written arguments regarding the issue of detention.

This development has triggered concerns about freedom of the press, with media outlets highlighting the impact of the imposed gag order. The New York Times, in an August 2 letter addressed to the judge, urged a modification of the restriction to solely cover comments that could potentially disrupt a fair trial.

The ongoing coverage of the case has shone a spotlight on the intersection of legal proceedings and media freedom, particularly as it relates to the dissemination of personal information and the quest for a just trial.