Sam Bankman-Fried Jailed Ahead of Trial
A judge on Friday revoked FTX founder Sam Bankman-Fried’s bail and sent him to jail ahead of his October trial.
Bankman-Fried faces seven separate charges including wire fraud, commodity and securities fraud in connection with the FTX collapse.
NEW YORK – FTX founder Sam Bankman-Fried was sent to prison ahead of his October trial on multiple financial crime charges after a federal judge revoked his release on bail on Friday afternoon, saying the former crypto heavyweight had apparently attempted tampering with witnesses.
Bankman-Fried is willing “to take the risk of crossing the line to get [the line]wherever it is,” Judge Lewis Kaplan of the US District Court for the Southern District of New York later concluded : “All things considered, I will revoke the bail.”
He added: “My conclusion is that there is probable reason to believe that the defendant attempted to tamper with witnesses on at least two occasions. … There is a rebuttable presumption that there is no set of conditions ensuring Bankman-Fried’s will will not pose a threat.
Barbara Fried and Joseph Bankman, Bankman-Fried’s parents, were present at the hearing. Fried cried softly after the judge’s verdict.
Bankman-Fried, the 31-year-old former CEO of crypto exchange FTX, appeared in court on Friday after the U.S. Department of Justice requested him to be tried on charges of attempting to violate the terms for violating his bond, sending him back to prison tampering with multiple witnesses. According to the DOJ, Bankman-Fried’s contacting former FTX.US General Counsel Ryne Miller and using a virtual private network to watch the Super Bowl, according to his defense team, was enough to generate a to require a change in its deposit terms. The final straw that broke the camel’s back, however, was when Bankman-Fried shared part of the private diary of former Alameda Research CEO Caroline Ellison with the New York Times.
Judge Kaplan cited both attempts to contact former FTX employees in a lengthy oral order.
While using a VPN might not be all that important per se, it speaks to Bankman-Fried’s mindset, he said.
Bankman-Fried’s defense team admitted he shared some diary pages with the Times, but his lawyers denied he attempted to tamper with a witness.
“Here we have a very thin file with a lot of spin,” his attorney told the judge.
The defense also argued that Bankman-Fried’s incarceration would make preparing for his trial more difficult.
Judge Kaplan was unconvinced by these arguments: “I don’t think revocation poses an insurmountable problem.”
During the hearing, Assistant US Attorney Danielle Sassoon argued that Bankman-Fried’s detention was also through justified by the fact that he is increasingly visiting New York for pre-trial conferences and pre-trial meetings.
“He’s practically unattended while he’s here,” she said.
The DOJ also had alternative options in the event the judge denied Bankman-Fried’s incarceration outright. The government would have agreed to detention at home, banning all visitors and shutting down all internet access except for two databases needed to prepare for the trial.
This would have included the suspension of Google Drive, Sassoon said, noting that Ellison’s journal was part of the Drive files that Bankman-Fried had access to.
Mark Cohen, Bankman-Fried’s attorney, tried to argue that there was insufficient legal basis to send him to prison before trial and that the standards set in precedents had not been met.
“The only reason we know about [Bankman-Fried meeting with a Times reporter] is that he complied with his bail conditions,” Cohen said.
Sassoon, the prosecutor, disagreed.
“I think the fact that the defendant was more subtle in his methods than a gangster doesn’t mean it was harmless,” she said.
Bankman-Fried is currently scheduled to go on trial in early October on wire fraud, merchandise fraud, securities fraud, money laundering and related conspiracy charges. He faces another trial, expected in March next year, on additional charges filed by the Justice Department following Bankman-Fried’s arrest and extradition.
Certain pre-trial motions from both the prosecution and the defense must be filed with the court by Monday, August 14.
Lawyers for both the defense and prosecution said they are on track to meet next week’s deadlines.
Bankman-Fried’s attorneys said they would appeal the decision and requested that bail revocation be stayed pending the appeal hearing. The judge refused the suspension.
Just because Bankman-Fried went to jail before his trial doesn’t mean he went to jail afterwards. He would have to be found guilty of at least one of the charges against him and then sentenced to prison.
UPDATE (11 Aug 2023 20:15 UTC): Updated with details throughout.
UPDATE (11 Aug 2023 21:30 UTC): Adds additional details.
