New York Times: FTX Founder Sam Bankman-Fried Jailed Ahead of Trial for Alleged Witness Tampering
In a recent development, FTX founder Sam Bankman-Fried has been ordered to await trial in jail after his bail hearing. U.S. District Judge Lewis A. Kaplan made this decision based on allegations that Bankman-Fried had attempted to influence witnesses against him.
Prosecutors claimed that Bankman-Fried had harassed a key witness in his fraud case by exposing her private writings to a journalist and contacting the general counsel for FTX with an encrypted communication. In response, Bankman-Fried’s defense argued that he was merely defending his reputation against numerous negative news stories.
Judge Kaplan, however, found probable cause to believe that Bankman-Fried had attempted to tamper with witnesses on at least two occasions since his arrest in December. Bankman-Fried’s defense plans to appeal the incarceration order and has requested an immediate stay.
Currently, the 31-year-old entrepreneur has been under house arrest at his parents’ home in Palo Alto, California. In addition, his $250 million bail package imposes strict restrictions on his internet and phone usage.
This recent development comes after prosecutors demanded Bankman-Fried’s incarceration, alleging that he violated the aforementioned restrictions by providing The New York Times with private writings from Caroline Ellison, his former girlfriend and the ex-CEO of Alameda Research. Prosecutors assert that Bankman-Fried was attempting to tarnish her reputation and potentially influence future jurors for his upcoming trial in October. Ellison, who faces significant penalties, has agreed to testify against Bankman-Fried in exchange for a potentially less severe sentence.
Bankman-Fried’s defense team argued that their client’s attempt to defend his reputation was unsuccessful, as the article in question portrayed Ellison sympathetically. They also accused prosecutors of providing weak evidence consisting of speculation, innuendo, and scarce facts in their bid to have Bankman-Fried incarcerated.
In response to the detention request, Judge Kaplan issued a gag order prohibiting public comments by trial participants, including Bankman-Fried. David McCraw, a lawyer representing The New York Times, raised concerns about the First Amendment implications and the public interest in Ellison and her cryptocurrency trading firm. McCraw stated that Ellison had confessed to being central to a billion-dollar investor fraud scheme, which warranted public scrutiny and timely reporting.
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