FTX Founder Sam Bankman-Fried’s Bail Revoked Over Witness Tampering Claim

FTX Founder Sam Bankman-Fried’s Bail Revoked Over Witness Tampering Claim – Sam Bankman-Fried, the indicted founder of the bankrupt cryptocurrency exchange FTX, had his bail revoked by a US judge on Friday. This decision comes ahead of his October fraud trial and follows accusations from prosecutors that he interfered with witnesses. Judge Lewis Kaplan made the announcement during a hearing in federal court in Manhattan regarding Bankman-Fried’s bail conditions. 

The move by federal prosecutors in Manhattan to incarcerate Bankman-Fried came unexpectedly during a hearing on July 26, 2023. They cited his act of sharing personal writings of his former romantic partner, Caroline Ellison, with a New York Times reporter as the reason for their request, stating that he had gone beyond acceptable boundaries. 

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Bankman-Fried entered a plea of not guilty to the allegation of embezzling billions of dollars from FTX customer funds.  These funds were purportedly used to cover losses incurred by his Alameda Research hedge fund, a company where Caroline Ellison held the position of chief executive. 

According to his legal team, prosecutors misconstrued Bankman-Fried’s motives in sharing Ellison’s writings, contending that he aimed to safeguard his reputation and exercise his right to communicate with the media. Judge Kaplan stated that he had determined that there was reasonable cause to believe that Bankman-Fried had made attempts to “tamper with witnesses on at least two occasions” following his arrest in December. 

A defense attorney indicated that they would file an appeal against the order for his incarceration and requested an immediate suspension of the order. Since his arrest in December 2022, Bankman-Fried has primarily been under house arrest at his parents’ residence in Palo Alto, California, on a $250 million bond. During the hearing on July 26, Judge Kaplan imposed restrictions on Bankman-Fried, preventing him from publicly discussing his case. 

He also asked both sides to submit written arguments regarding whether Bankman-Fried should be detained. Ellison, along with two other former close associates of Bankman-Fried, has already pleaded guilty to fraud and agreed to cooperate with the US Attorney’s Office in Manhattan. It is anticipated that she will provide testimony against him during his scheduled trial on October 2. 

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The imposed restriction on discussing the case has attracted attention from the media, including The New York Times, which, in a letter dated August 2, suggested that the limitation be relaxed to only prohibit statements that could impede a fair trial. On July 20, an article in the newspaper included excerpts from Ellison’s personal Google documents prior to the collapse of FTX. She described being “unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her personal breakup with Bankman-Fried.

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