FTX’s Sam Bankman-Fried Sent To Jail Over Witness Tampering

Former crypto multi-billionaire Sam Bankman-Fried was sent to prison last week, after US judge sided with a request from federal prosecutors to revoke the FTX founder’s $250m bail.

Last month US prosecutors had accused Bankman-Fried of witness tampering and asked US District Judge Lewis Kaplan to issue an order that would ban the former FTX CEO and other parties from making public statements likely to interfere with a fair trial.

Prosecutors referenced a New York Times article titled “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case.”

Witness tampering

The article reported excerpts from Ellison’s personal Google documents from before the collapse of FTX in which she spoke about being “pretty unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her breakup with Bankman-Fried.

US prosecutors allege it was apparent Bankman-Fried had shared documents with the New York Times and that his lawyers have since confirmed to the government that he met with one of the article’s authors in person and shared documents “that were not part of the government’s discovery material.”

US prosecutors argued that by sharing these documents, Bankman-Fried was trying to malign Ellison’s credibility, and that such conduct could chill witnesses from testifying and taint the jury pool.

Now CNBC has reported that Sam Bankman-Fried was sent to jail last Friday.

He was remanded to custody directly from a court hearing in New York and sent to Brooklyn’s Metropolitan Detention Center, Bureau of Prisons records show.

Judge Kaplan denied Bankman-Fried’s request for delayed detention pending an appeal.

Unless the appeal is successful, he is expected to remain in custody until his criminal trial, which is slated to begin on 2 October.

Judge ruling

“My conclusion is there is probable cause to believe the defendant tried to tamper with witnesses at least twice,” Judge Kaplan was reported as saying during his ruling.

As the court marshals took Bankman-Fried into custody at the end of the hearing, the defendant took off his blazer, tie, emptied his pockets, and appeared to remove his shoes, CNBC reported.

Bankman-Fried’s parents were both in the gallery. His mother had her face buried in her hands for much of Judge Kaplan’s lengthy ruling.

Both Bankman-Fried’s parents are Stanford Law School professors.

Judge Kaplan had previously issued a direct and stern warning to Bankman-Fried in July over his conversations with the media, CNBC reported.

Free speech?

CNBC also reported that members of the press, including counsel for The New York Times and the Reporters Committee for Freedom of the Press, had filed letters objecting to Bankman-Fried’s detention, citing free speech concerns.

Defense attorneys had similarly argued that Bankman-Fried was asserting his first amendment right and did not violate any terms of his bail conditions by speaking with journalists.

During his 33-minute ruling, Judge Kaplan walked through his rationale as to why probable cause for witness tampering had been met by the prosecution, adding that Bankman-Fried’s contribution to the Ellison story was designed to “hurt” and “discredit” a witness.

“Faced with a series of conditions meant to limit the defendant’s use of the internet and the phone, the defendant pivoted to in-person machinations,” the prosecution said of Bankman-Fried, whose revised bail conditions include restricted internet access and a ban from smartphone use.

According to CNBC, the government added that Bankman-Fried had over 100 phone calls with one of the authors of the Times story prior to publication – many of which lasted for approximately 20 minutes.

The prosecution described the effort by Bankman-Fried as an attempt to discredit Ellison, characterising it as a “means of indirect witness intimidation through the press.”

It is an argument that proved sufficient to convince Judge Kaplan to send Bankman-Fried to jail ahead of his trial, CNBC noted.

FTX collapse

Sam Bankman-Fried, who once had a net worth of $26 billion, had been free on a $250 million bail after he was extradited to the United States from the Bahamas.

Until last week he had resided under strict supervision at his parents’ home in Palo Alto, California.

Bankman-Fried has pleaded not guilty to eight federal fraud and conspiracy charges over his role in the collapse of the FTX crypto exchange, when a multi-billion dollar hole was found in its balance sheet.

In February this year US authorities levelled four more criminal charges against Bankman-Fried, alleging he facilitated hundreds of illegal political donations totalling tens of millions of dollars.

He plead not guilty to those additional charges.

In total, Bankman-Fried faced a total of 13 criminal charges, and if found guilty, could be sentenced to over 115 years in prison.

However late last month federal prosecutors dropped a campaign finance charge against Sam Bankman-Fried, the second time they narrowed the indictment against him.

It comes after FTX Trading recently filed a fresh lawsuit against Bankman-Fried and other former executives, seeking to recoup more than $1 billion they alleged was misappropriated before FTX went bankrupt.