Judge sends FTX founder Sam Bankman-Fried to jail, says crypto mogul tampered with witnesses

FTX founder Sam Bankman-Fried was taken into custody by authorities on Friday, leaving a federal courtroom with handcuffs after a judge decided to revoke his bail. This decision came after the judge concluded that Bankman-Fried, a once-respected figure in the cryptocurrency world, had repeatedly attempted to influence witnesses against him.

As Judge Lewis A. Kaplan explained his reasoning, Bankman-Fried listened with his head down. Judge Kaplan emphasized that Bankman-Fried’s actions had pushed the limits of his $250 million bail, raising concerns about the safety of the community and the integrity of the ongoing legal proceedings. The judge felt that the only way to ensure the protection of witnesses and the community was to have Bankman-Fried in custody.

Following the hearing’s conclusion, Bankman-Fried removed his suit jacket and tie, handing over personal items to his legal team. The sound of handcuffs was heard as they were placed on his wrists. U.S. marshals then escorted him out of the courtroom.

This marked a significant downfall for someone who was once hailed as a knowledgeable visionary in the crypto realm. Bankman-Fried had even testified before Congress and enlisted celebrities like Larry David, Tom Brady, and Stephen Curry to promote his ventures.

Judge Kaplan asserted that there was credible evidence indicating Bankman-Fried’s attempts to tamper with witnesses, citing instances where he shared private writings of a former girlfriend and key witness with a journalist. Additionally, the judge highlighted an encrypted communication sent to FTX’s general counsel in January as evidence of tampering.

Kaplan believed that Bankman-Fried’s efforts were aimed at influencing not only expected trial witnesses but potentially others whose identities might not yet be known. This behavior suggested an attempt to discourage cooperation with the government and hinder the legal proceedings.

Bankman-Fried’s legal team argued that his intentions were innocent and motivated by a desire to safeguard his reputation against negative media coverage. Attorney Mark Cohen requested the judge to suspend the order for immediate incarceration, but this plea was denied. The defense swiftly filed a notice of appeal in response.

Until this point, Bankman-Fried had been under house arrest at his parents’ residence in Palo Alto, California, after being extradited from the Bahamas in December. He faced charges of defrauding investors and redirecting substantial amounts of cryptocurrency from customers using his FTX exchange.

The judge acknowledged that Bankman-Fried’s bail conditions included stringent restrictions on his internet and phone usage, but highlighted that these limitations did not prevent him from contacting a senior FTX attorney in January. This communication raised concerns for the judge, suggesting potential engagement in federal felonies while on release.

Judge Kaplan dismissed the defense’s assertion that the communication was harmless and interpreted it as an attempt to align recollections between Bankman-Fried and the FTX general counsel.

Prosecutors had demanded Bankman-Fried’s incarceration earlier due to alleged rule violations, such as sharing private writings of Caroline Ellison, his former girlfriend and ex-CEO of Alameda Research, with The New York Times. Prosecutors believed this was an effort to tarnish her reputation and potentially influence future jurors.

Judge Kaplan echoed these concerns, stating that the shared excerpts were not the kind of information typically disclosed, except with the intention to harm or discredit the subject.

Ellison had already pleaded guilty to criminal charges and agreed to testify against Bankman-Fried as part of a deal for a potentially reduced sentence. Bankman-Fried’s defense contended that the article actually portrayed Ellison in a favorable light, suggesting his attempt to protect his reputation failed.

Throughout this legal process, Judge Kaplan imposed a gag order to prevent public comments from trial participants, including Bankman-Fried. The New York Times lawyer, David McCraw, raised concerns about First Amendment implications and the public interest in Ellison and her cryptocurrency trading firm, emphasizing the importance of providing accurate and timely information to the public.

Frequently Asked Questions (FAQs) about Cryptocurrency mogul

More about Cryptocurrency mogul

• FTX founder Sam Bankman-Fried jailed for tampering with witnesses
• FTX Exchange
• Sam Bankman-Fried’s Testimony Before Congress
• FTX CEO Enlists Celebrities to Promote Businesses
• Details about Caroline Ellison’s Plea Deal
• First Amendment Implications