FTX founder Sam Bankman-Fried has had his bail revoked by a federal judge and is now facing jail time for allegedly tampering with witnesses in his upcoming fraud trial. US District Judge Lewis Kaplan made the decision to detain Bankman-Fried after finding probable cause that he had harassed his former girlfriend and FTX executive Carline Ellison by sharing her private journals with the New York Times. Bankman-Fried’s lawyers have filed an appeal against the incarceration order, but if unsuccessful, he will remain in custody until his trial begins on October 2nd.
Bankman-Fried, a 31-year-old former cryptocurrency billionaire, had been under house arrest on $250 million bail at his parents’ home in Palo Alto since he was extradited from the Bahamas last December. He is facing charges of defrauding investors of billions of dollars in his failed FTX cryptocurrency exchange. Despite court orders restricting his internet and phone use, prosecutors claim Bankman-Fried continued to communicate with journalists and even contacted a general counsel for FTX using encrypted communication.
If his appeals fail, Bankman-Fried may be sent to the Metropolitan Detention Center in Brooklyn while he awaits trial. Federal prosecutors have accused him of stealing billions of dollars from the crypto exchange to pay off debts for his hedge fund, purchase real estate in the Bahamas, and donate to political campaigns. They allege that he illegally diverted millions of dollars from customers’ cryptocurrency accounts through his FTX exchange. Bankman-Fried has pleaded not guilty to all charges.
During the hearing in Manhattan, prosecutors described Bankman-Fried’s interactions with the press as a “pattern of witness tampering and evading his bail conditions.” They claimed that he sent hundreds of emails and made over 1,000 calls to journalists in recent months. The leaking of Ellison’s diaries to the New York Times was seen as an attempt to discredit her and intimidate her indirectly through the press.
Lawyers for the New York Times and the Reporters Committee for Freedom of the Press objected to the detention order, while Bankman-Fried’s defense attorneys argued that the prosecutor’s arguments were based on “innuendo, speculation, and scant facts.” The Justice Department argued that Bankman-Fried should be held in a jail in New York’s Putnam County Correctional Facility, where he will have limited access to the internet in order to prepare for his trial defense. Ellison, the former CEO of Alameda Research, has already pleaded guilty to federal charges and is cooperating with prosecutors.