Sam Bankman-Fried will go to jail on Friday because a judge agreed with federal prosecutors that the FTX founder tampered with witnesses and should lose his bail. After a court meeting in New York, Bankman-Fried will be taken into custody, where he will stay until his criminal trial starts on Oct. 2.
Judge Lewis Kaplan turned down Bankman-Fried’s request to stay out of jail while she filed an appeal.
Bankman-Fried has been on $250 million bail since he was arrested in December. He has to stay at his parents’ house in Palo Alto, California.
Bankman-Fried’s court appearance on Friday is the latest in a series of pre-trial meetings about the ex- billionaire’s continued interactions with the press, which the Justice Department calls a “pattern of witness tampering and evading his bail conditions.”
In July, Bankman-Fried’s talks with the media got Bankman-Fried a straight and harsh warning from Judge Kaplan.
Lawyers for The New York Times, the Reporters Committee for Freedom of the Press, and other press members had written letters protesting Bankman-Fried’s arrest because it violated their right to free speech. Lawyers for the defence had also said that Bankman-Fried was using his right under the First Amendment and did not break any of his bail conditions by talking to reporters.
The defence had also hoped that Bankman-Fried’s case would be helped by the disclosure process.
Lawyers for the former head of FTX said that Bankman-Fried would not be able to prepare for his trial if he was in jail because there were so many discovery papers that could only be seen on a computer with internet access.
In the move for Bankman-Fried’s detention, the government said that over the last few months, the defendant had sent over 100 emails to the media and made over 1,000 phone calls to press members. Prosecutors say the final straw was when Bankman-Fried gave the New York Times private notebook entries of his ex-girlfriend Caroline Ellison. In December 2022, Ellison agreed to plead guilty to federal charges.
Ellison has been helping the government since December. He was also the CEO of Bankman-Fried’s failed crypto hedge fund, Alameda Research, and is expected to be a star witness for the prosecution.
“Faced with a series of conditions meant to limit the defendant’s use of the internet and phone, the defendant turned to in-person schemes,” the prosecution said of Bankman-Fried, whose new bail conditions limit internet access and ban smartphone use.
The government also said that Bankman-Fried had talked on the phone with one of the writers of the Times story more than 100 times before the story came out, and many of those calls were about 20 minutes long.
The prosecution said that Bankman-Fried’s actions were an attempt to undermine Ellison. Bankman-Fried is charged with wire and securities fraud concerning the alleged multibillion-dollar FTX fraud. The prosecution called Bankman-Fried’s actions a “means of indirect witness intimidation through the press.”
It was a strong enough reason for Judge Kaplan to put Bankman-Fried in jail before his trial.
The prosecution has had to drop two charges because of an extradition deal with The Bahamas, where Bankman-Fried was in jail. In a letter to the judge, the government said it would file a new charge that would replace the old one next week.
