Sam Bankman-Fried (SBF) was jailed on Friday, August 11, after a New York judge revoked the FTX founder’s $250 million bail on allegations he tampered with witnesses in his upcoming fraud trial.
U.S. District Judge Lewis Kaplan made the decision after federal prosecutors alleged the 31-year-old crypto kingpin tried to harass a star witness in his case in July, according to several reports.
Handcuffed Bankman-Fried goes to jail
Sam Bankman-Fried, whose net worth peaked at a whopping $26 billion, operated one of the world’s largest crypto exchanges from the Bahamas until he was forced to step down as FTX’s chief executive officer in November 2022.
SBF was charged with several counts of fraud in the U.S. following allegations that he stole “billions of billions” from investors and spent millions more in political donations to gain influence and impact policy in Washington DC. He has pleaded not guilty.
In his ruling, Judge Kaplan found that there was enough evidence to believe Bankman-Fried tried to influence the testimony of witnesses in his case “at least twice” since he was arrested in December, CNBC reported.
The disgraced mogul was handcuffed by US Marshals and led out of the hearing in a federal court in Manhattan, New York, according to a report from CNN. He had his shoelaces, tie, and jacket removed, and his pockets emptied – a standard procedure for persons going to jail.
SBF’s parents were both present in the court gallery and his mother was reportedly visibly distressed by the judge’s decision to send her son to jail. Judge Kaplan rejected Bankman-Fried’s request to be remanded out of custody while he appeals the ruling.
The FTX exchange founder is expected to stay in jail until his criminal trial on Oct. 2, unless his appeal is successful, CNBC reports. Prosecutors want SBF jailed in Putnam, New York, “where he would have access to a laptop with internet access for his defense preparation.”
Metropolitan Detention Center in Brooklyn, which is closer to the courthouse, has limited internet access for prisoners, they say.
SBF vs Ellison: Lover-gamblers turn on each other
Sam Bankman-Fried was arrested in the Bahamas last year on charges of fraud and market manipulation. He was later extradited to the United States, where he has been under house arrest at his parents’ home in Palo Alto, California ever since.
The $250 million bail package that SBF posted included strict restrictions on his internet and phone usage. However, two weeks ago, prosecutors alleged that he violated those rules by giving The New York Times private writings from Caroline Ellison, a key witness in his case.
Ellison, a quiet polymath daughter of MIT economics professors, is SBF’s ex-girlfriend and former CEO of FTX’s sister firm, Alameda Research. Prosecutors argue SBF is trying to make Ellison look bad, potentially influencing jurors who may be called for his trial in October.
In Dec. 2022, Ellison pleaded guilty to federal criminal charges. She has agreed to cooperate with prosecutors in their case against Bankman-Fried in exchange for a reduced sentence in her charges, which carry a maximum sentence of 110 years in prison.
I don't think I've ever seen this before. The New York Times just submitted a letter to the court in Sam Bankman-Fried's case about why he was fine to share Caroline Ellison's diary entries with them and why the Judge shouldn't revoke bail and detain him now:
"While the current… pic.twitter.com/IV5InzDhxV
— Zack Guzmán (@zGuz) August 3, 2023
Lawyers representing SBF argue that he should not be punished for trying to defend his reputation against several negative news stories published about him. They say the former FTX boss has the right to speak to the press.
According to the defendant’s lawyers, prosecutors were trying to get Bankman-Fried jailed using evidence made up of “innuendo, speculation, and scant facts.”
Judge Kaplan previously issued a stern warning to Bankman-Fried about his conversations with the media. He told SBF that he could not speak to the press about his case and that any future violations of the rules could result in his bail being revoked.