Judge Sends FTX Founder Sam Bankman-Fried To Jail, Says Crypto Mogul Tampered With Witnesses

NEW YORK — Sam Bankman-Fried, the founder of FTX, was placed behind bars after a judge revoked his bail on Friday. The judge reasoned that Bankman-Fried had frequently attempted to sway witnesses against him.

Bankman-Fried bowed his head as Judge Lewis A. Kaplan went into great detail about why he thought the Californian had repeatedly exceeded the terms of his $250 million bail package to the point where Kaplan could no longer guarantee the community’s safety, including the safety of the prosecution’s witnesses, without the 31-year-old being imprisoned.

Bankman-Fried removed his tie and suit jacket once the session was concluded, giving his watch and other personal items to his attorneys. His hands were shackled in front of him, and there was the ringing of handcuffs. U.S. marshals then escorted him out of the courtroom.

It was a dramatic fall for a man who, according to the prosecution, presented himself to Congress as “a saviour of the cryptocurrency industry” and paid celebrities like Larry David, Tom Brady, and Stephen Curry to promote his ventures.

To influence cryptocurrency regulation in Washington, according to the prosecution, Bankman-Fried stole billions of dollars in FTX customer deposits to fund his businesses and speculative venture investments, make charitable contributions, and spend tens of millions of dollars on illegal campaign donations to Democrats and Republicans.

Sam Bankman-Fried, the founder of FTX, was placed behind bars after a judge revoked his bail on Friday.

Kaplan stated that there was reason to believe Bankman-Fried had attempted to “tamper with witnesses at least twice” since his detention in December, most recently by revealing to a reporter the private diaries of a key witness against him and in January when he communicated with the general counsel of FTX using an encrypted message.

The court stated that after considering all the evidence, he concluded that Bankman-Fried had likely attempted to persuade both prospective trial witnesses “and quite likely others whose names we don’t even know” to “back off, to have them hedge their cooperation with the government.”

The judge’s signature on the detention order stated that Kaplan had reason to think Bankman-Fried had tried witness tampering, a criminal offense.

The defense team for Bankman-Fried maintained that their client had no malicious intent and shouldn’t go to prison for attempting to shield his reputation from a steady stream of negative press.

To file an instant appeal, Mark Cohen’s attorney urged the judge to suspend the detention order; Kaplan denied the motion. Defense attorneys submitted a notice of appeal in less than an hour.

Bankman-Fried was detained for the night at the Metropolitan Detention Centre in Brooklyn, which has previously held convicted sex offenders R. Kelly and Ghislaine Maxwell and “pharma bro” pharmaceutical magnate Martin Shkreli.

Sam Bankman-Fried, the founder of FTX, was placed behind bars after a judge revoked his bail on Friday.

Since his December extradition from the Bahamas on charges that he deceived investors in his enterprises and illegally misappropriated millions of dollars worth of bitcoin from users using his FTX exchange, Bankman-Fried had been under house arrest at his parent’s residence in Palo Alto, California.

His bail terms tightly constrained his internet and phone usage.

The judge remarked that despite the severe regulations, he nevertheless managed to get in touch with a prominent FTX attorney in January and express his desire to “reconnect and see if there is a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other.”

When questioned about the contact during a hearing in February, Kaplan said it “suggests to me that maybe he has committed or attempted to commit a federal felony while on release.”

Kaplan stated on Friday that he was dismissing the defense’s assertions that the communication was innocent.

Instead, he claimed, it appears to be a request for the FTX general counsel “to get together with Bankman-Fried” so that their memories “are on the same page.”

Attorneys for Bankman-Fried were taken aback two weeks ago when prosecutors demanded that he be imprisoned because he had broken the law by revealing to The New York Times the private writings of Caroline Ellison, his ex-girlfriend and the former CEO of Alameda Research, a cryptocurrency trading hedge fund that was one of his companies.

He allegedly shared profound ideas about her career and love relationship with Bankman-Fried to damage her image and sway potential jurors who might be called for his October trial.

Sam Bankman-Fried, the founder of FTX, was placed behind bars after a judge revoked his bail on Friday.

The judge stated on Friday that the excerpts of Bankman-Fried’s communications with Ellison were the kinds of things that a person in a relationship “would be very unlikely to share with anybody, lest The New York Times, except to hurt, discredit, and frighten the subject of the material,” according to the judge.

Ellison entered a guilty plea in December to charges that could have resulted in a 110-year prison sentence. She consented to give testimony against Bankman-Fried as part of a settlement that might result in a less severe punishment.

Bankman-Fried’s attorneys contended that since the article portrayed Ellison in a favorable light, he most likely failed in his attempt to defend his reputation. Furthermore, they claimed that the prosecution overstated Bankman-Fried’s involvement in the paper.

They said the prosecution attempted to convict their client by presenting evidence that was “innuendo, speculation, and scant facts.”

Since the prosecution requested detention, Kaplan had imposed a gag order prohibiting trial participants—including Bankman-Fried—from making public statements.

In a letter to the judge, David McCraw, an attorney for the Times, noted the First Amendment repercussions of any general gag order and the public’s interest in Ellison and her bitcoin trading business.

According to McCraw, Ellison admitted to playing a crucial part in a scheme that defrauded investors of billions of dollars and went unnoticed.

“It is not surprising that the public wants to know more about who she is and what she did, and that news organisations would seek to provide the public with timely, pertinent, and fairly reported information about her, as The Times did in its story,” McCraw stated.

SOURCE – (AP)