During a hearing on Friday, a federal judge rescinded FTX founder Sam Bankman-Fried’s bail, resulting in his imprisonment.
Bankman-Fried has been on house arrest in California following his extradition from the Bahamas in December. He entered a plea of not guilty to allegations of embezzling billions from FTX customer funds to cover losses at his hedge fund, Alameda Research.
For the most part, he has been restricted to his parent’s residence in Palo Alto, California. He managed to evade complete incarceration before his trial by posting a $250 million bond upon his December 2022 arrest.
Accused by prosecutors, the former billionaire is claimed to have “crossed a line” by disclosing ex-girlfriend Caroline Ellison’s private writings to a New York Times journalist.
Kaplan ruled that the FTX CEO’s actions seemed to intimidate witnesses and potentially bias the jury pool, leading him to order Bankman-Fried’s detention.
Kaplan said, “There is probable cause to believe that the defendant has attempted to tamper with witnesses at least twice.”
“No set of release conditions can assure the safety of the community,” Danielle Sassoon, one of the prosecutors, said. “The defendant has shown now that he is intent on exploiting the conditions of release and improperly influencing this trial.” https://t.co/fKkg4zml31
— NYTimes Tech (@nytimestech) August 11, 2023
Bankman-Fried’s legal team has indicated their intention to appeal the ruling.
Ellison, the former leader of Alameda Research, had pleaded guilty to fraud and was expected to serve as a witness against Bankman-Fried in the courtroom.
The ruling may introduce challenges for the disgraced cryptocurrency tycoon as he readies himself for trial. Bankman-Fried is confronting accusations of embezzling billions from FTX customer funds to offset losses incurred by his Alameda Research hedge fund.
The purported disclosure of Ellison’s diary served as the tipping point for prosecutors. They contended that through this act, the defendant aimed to “portray a key cooperator testifying against him in a poor inculpatory light.”
Known widely as SBF, Bankman-Fried was awaiting a trial scheduled to commence on October 2nd, following government charges for orchestrating one of history’s largest financial frauds. In the event of a conviction, SBF could potentially face a life sentence in prison.
Bankman-Fried’s legal team contended that prosecutors inaccurately portrayed his motives for sharing Ellison’s writings.
His lawyers wrote, “In support of its theory that Mr. Bankman-Fried ‘tampered’ with witnesses, the government proffers evidence that consists of innuendo, speculation and scant facts. The government’s showing is a far cry from the evidence presented in cases in this district where remand has been ordered in connection with alleged witness tampering and in no way supports revocation of Mr. Bankman-Fried’s bail.”
