A federal judge revoked bail for FTX co-founder Sam Bankman-Fried, citing probable cause that the accused crypto fraudster attempted to tamper with witnesses.
Bankman-Fried was remanded, at least temporarily, to the Metropolitan Detention Center in Brooklyn, while the parties sort out details of how he will review discovery materials ahead of a trial scheduled for October.
Following the ruling, US marshals handcuffed Bankman-Fried and escorted him out of the courtroom.
Bankman-Fried’s lawyers immediately filed a notice of appeal on Friday.
Allegations of witness tampering
Prosecutors sought to revoke bail after what they described as a series of violations by Bankman-Fried, including contacting potential witnesses against him, using a virtual private network to subvert monitoring and speaking with a reporter about former FTX executive Caroline Ellison.
Ellison, who is also Bankman-Fried’s ex-girlfriend, is one of several former business partners who has taken a plea deal and plans to testify against him.
Judge Kaplan on Friday sided with prosecutors’ claim that Bankman-Fried was “covering his tracks” when he allegedly leaked Ellison’s personal documents to the New York Times by allowing a reporter to review them in-person. Kaplan added that leaking an ex-girlfriend’s intimate writings would only be done “to hurt, discredit and frighten the subject of the material.”
Bankman-Fried’s attorneys argued that he has a right to defend his reputation in the press. They also stressed that the complexity of his defense, which involves hundreds of thousands of documents, requires Bankman-Fried to have regular access to a computer and the internet.
His lawyers had also agreed to a gag order that would limit Bankman-Fried’s contact with individuals outside of the case. But Kaplan said Friday that a gag order wouldn’t be sufficient, given Bankman-Fried’s history of toeing of the line.
Allegations of fraud
Bankman-Fried, 31 years old, has pleaded not guilty to multiple conspiracy and fraud charges. His trial date is set for October.
Since his arrest in December, he has repeatedly broken with standard legal advice when it comes to speaking to the media. He has blogged, tweeted and appeared on live interviews to broadcast his version of FTX’s downfall. In his telling, he admits to making mistakes as CEO but says he never knowingly committed fraud.
Prosecutors have characterized Bankman-Fried as the mastermind of one of the biggest financial frauds in US history. He is accused of stealing deposits from his cryptocurrency exchange FTX to finance risky bets at his crypto hedge fund, Alameda Research; funnel contributions to American politicians; and underwrite a luxury lifestyle for himself and his employees in the Bahamas.
Before its collapse, FTX was one of the largest crypto-trading platforms in the world, backed by A-list celebrities and featured in Super Bowl commercials. But the company came unglued in the span of a week last November as concerns about its financial ties to Bankman-Fried’s crypto hedge fund, Alameda Research, spurred investors and customers to yank their funds. The company filed for bankruptcy and quickly became the center of the federal fraud investigation.
— CNN’s Kara Scannell contributed to this article.
