Former FTX CEO, Sam Bankman-Fried, was sent to jail on Friday as a result of his bail being revoked due to alleged witness tampering. Bankman-Fried had been under house arrest at his parents’ residence in Palo Alto, California, after posting a staggering $250 million bond. Known as SBF, Bankman-Fried was awaiting trial following charges brought by the U.S. government for orchestrating a major financial fraud scheme. If convicted, Bankman-Fried faces a potential life sentence.
Prosecutors had sought to revoke Bankman-Fried’s bail, accusing him of tampering with witnesses. Specifically, they claimed that he leaked private diary entries from his former girlfriend, Caroline Ellison, to The New York Times. Ellison, who was the former head of Alameda Research, a hedge fund co-founded by Bankman-Fried, was expected to testify against him in court after pleading guilty to fraud charges herself. U.S. District Court Judge Lewis Kaplan sided with prosecutors, ordering Bankman-Fried’s detention, citing attempts to intimidate witnesses and influence the jury pool. Bankman-Fried’s legal team has appealed the decision.
The alleged leak of Ellison’s diary entries, which contained personal and professional reflections, was seen as a deliberate attempt by Bankman-Fried to discredit a key witness appearing against him. Prosecutors argued that this leaked information was intended to intimidate and manipulate Ellison’s upcoming trial testimony, as well as potentially affect other potential trial witnesses. They also pointed out that Bankman-Fried had flouted the terms of his bail agreement by talking to the media, including participating in over 1,000 phone calls with journalists, and engaging in conversations with author Michael Lewis, who is writing a book about Bankman-Fried.
Bankman-Fried’s attorneys, invoking the First Amendment, unsuccessfully argued against his detention. The New York Times Company and the Reporters Committee for Freedom of the Press expressed concerns that the decision to jail Bankman-Fried could have a chilling effect on free speech. Bankman-Fried’s lawyers also highlighted the difficulty in defending him against government charges with the added restriction of his detention, considering the extensive amount of material they needed to review with their client. Judge Kaplan had previously imposed a temporary gag order on Bankman-Fried while evaluating the allegations of witness tampering.
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