Sam Bankman-Fried will be imprisoned starting this Friday following a judge's decision to support federal prosecutors' request for revoking bail for the FTX founder due to alleged witness tampering. Bankman-Fried was taken into custody immediately after a court session in New York.
Judge Lewis Kaplan rejected Bankman-Fried's plea for delayed detention while awaiting an appeal. Unless the appeal proves successful, he is anticipated to remain incarcerated until his criminal trial, scheduled to commence on October 2.
"Based on the evidence, it is likely that the defendant attempted to interfere with witnesses on at least two occasions," Judge Kaplan stated in his verdict.
As court marshals apprehended Bankman-Fried at the conclusion of the hearing, he removed his blazer, tie, emptied his pockets, and seemingly took off his shoes. Bankman-Fried's parents were present in the courtroom, with his mother often covering her face with her hands throughout Judge Kaplan's extensive pronouncement.
The government requested that Bankman-Fried be confined in a jail located in Putnam, New York, where he would have access to a laptop with internet connectivity for defense preparations. This proposal differed from sending him to Brooklyn's Metropolitan Detention Center, which has limited internet availability for inmates and is closest to the courthouse.
Since his arrest in December, Bankman-Fried had been out on a $250 million bail, necessitating him to stay at his parents' residence in Palo Alto, California.
Bankman-Fried's appearance in court on Friday marked the latest in a sequence of pre-trial hearings relating to his ongoing interactions with the media – exchanges that the Justice Department portrays as a "pattern of witness tampering and evading bail conditions."
In July, Judge Kaplan previously issued a stern warning to Bankman-Fried regarding his communications with the press.
Multiple press members, including representatives from The New York Times and the Reporters Committee for Freedom of the Press, submitted letters objecting to Bankman-Fried's detention, citing concerns about freedom of speech. Defense attorneys likewise contended that Bankman-Fried was exercising his First Amendment rights and had not violated bail conditions by conversing with journalists.
The defense also pinned its hopes on the discovery process benefiting Bankman-Fried's case.
Lawyers representing the former FTX chief contended that his incarceration would impede proper trial preparation due to the extensive volume of discovery documents accessible solely through an internet-enabled computer.
In the motion urging Bankman-Fried's detention, the government alleged that over the past few months, he had sent more than 100 emails to the media and made over 1,000 phone calls to press members. Prosecutors claimed that Bankman-Fried's release of private diary entries from his ex-girlfriend, Caroline Ellison, to the New York Times was the final straw. Ellison had pleaded guilty to federal charges in December 2022.
Ellison, the former CEO of Bankman-Fried's failed crypto hedge fund, Alameda Research, has been cooperating with the government since December and is expected to be a key prosecution witness.
During his 33-minute ruling, Judge Kaplan expounded on the rationale behind the prosecution's establishment of probable cause for witness tampering, asserting that Bankman-Fried's actions concerning the Ellison narrative were aimed at undermining and discrediting a witness.
"In response to conditions designed to limit the defendant's internet and phone usage, the defendant resorted to in-person tactics," the prosecution alleged. Bankman-Fried's updated bail conditions now include restricted internet access and a prohibition on smartphone usage.
The government further indicated that Bankman-Fried had engaged in over 100 phone conversations with one of the authors of the Times article before its publication, many of which extended for approximately 20 minutes.
The prosecution depicted Bankman-Fried's efforts – as he faces multiple wire and securities fraud charges linked to the alleged multibillion-dollar FTX fraud – as an endeavor to undermine Ellison, labeling it a "form of indirect intimidation of a witness through the media."
This argument swayed Judge Kaplan to order Bankman-Fried's imprisonment prior to his trial.
In adherence to an extradition agreement with The Bahamas, where Bankman-Fried was previously held in custody, the prosecution has adjusted charges twice. In a letter to the Judge, the government announced its intention to file a new superseding indictment next week.
Comments