Title: Former Crypto Billionaire Sam Bankman-Fried’s Bail Revoked as Fraud Trial Looms
Former cryptocurrency billionaire Sam Bankman-Fried has had his bail revoked ahead of his upcoming fraud trial, after prosecutors accused him of tampering with witnesses. The decision was announced by US District Judge Lewis Kaplan during a hearing on Friday in federal court in Manhattan. Bankman-Fried, who is the founder of bankrupt cryptocurrency exchange FTX, is facing allegations of stealing billions of dollars in customer funds from FTX to cover losses at his Alameda Research hedge fund, where his former romantic partner Caroline Ellison served as CEO.
Prosecutors made a surprising request to jail Bankman-Fried during a hearing on July 26, claiming that he had crossed a line by sharing Ellison’s personal writings with a reporter from The New York Times. The 31-year-old entrepreneur has pleaded not guilty to the charges, and his lawyers argued that the prosecutors had mischaracterized his intentions in sharing the writings. They claimed that Bankman-Fried wanted to protect his reputation and that he had a right to speak to the press.
Since his arrest in December 2022, Bankman-Fried has been largely confined to his parents’ home in Palo Alto, California, with a bond of $250 million. However, the recent allegations of witness tampering led to the revocation of his bail. Ellison, along with two other former members of Bankman-Fried’s inner circle, has already pleaded guilty to fraud and agreed to cooperate with prosecutors. She is expected to testify against Bankman-Fried at his scheduled trial on October 2.
In the July 26 hearing, Judge Kaplan imposed restrictions on Bankman-Fried’s ability to discuss his case publicly and requested written arguments from both sides regarding the necessity of detention. The gag order caught the attention of the media, including The New York Times, which sent a letter to the judge on August 2, requesting a loosening of the measures to only restrict comments that could potentially interfere with a fair trial.
The Times had previously published excerpts from Ellison’s personal Google documents before the collapse of FTX. In those documents, she expressed dissatisfaction and feeling overwhelmed in her role, as well as hurt and rejected due to her personal breakup with Bankman-Fried.
As the fraud trial approaches, the decision to revoke Bankman-Fried’s bail underscores the seriousness of the charges against him. The case has garnered significant media attention, partly due to Bankman-Fried’s prominent position within the cryptocurrency industry and the high-profile nature of the allegations. It remains to be seen how the trial will unfold and what impact the testimonies of Ellison and other cooperating witnesses will have on the proceedings.
