Sam Bankman-Fried, the founding father of the collapsed cryptocurrency trade FTX, was ordered to jail on Friday after a federal choose in New York revoked his bail, in a dramatic twist lower than two months earlier than the case was set to go to trial.
Mr. Bankman-Fried, 31, had been below home arrest at his dad and mom’ house in Palo Alto, Calif., since he was arrested in December on fraud fees stemming from FTX’s implosion. But at Friday’s listening to, Judge Lewis A. Kaplan of Federal District Court in Manhattan mentioned that association must finish, after prosecutors argued that Mr. Bankman-Fried had given paperwork to the media to intimidate a witness within the case.
The determination was the most recent extraordinary growth in one of the crucial dramatic company implosions in latest reminiscence. FTX rode the highs of the cryptocurrency market to turn out to be one of many trade’s main corporations, earlier than submitting for chapter after a run on deposits final fall. Over only a few weeks, Mr. Bankman-Fried went from an trade titan courted by politicians and celebrities to a felony defendant dealing with a long time in jail.
Now he must put together for trial from a jail cell. The courtroom dispute over his bail targeted on an article in The New York Times revealed final month that described non-public writings by Caroline Ellison, an govt in Mr. Bankman-Fried’s business empire who additionally dated him. Ms. Ellison has pleaded responsible to fraud fees and agreed to cooperate with the prosecutors investigating Mr. Bankman-Fried.
In courtroom filings, prosecutors mentioned Mr. Bankman-Fried had given the paperwork to The Times to intimidate Ms. Ellison by casting her in a destructive mild forward of his trial in October. They additionally famous that Mr. Bankman-Fried has had quite a few conversations with different journalists, together with the writer Michael Lewis, who’s writing a e-book about FTX that’s set for publication the week the trial begins.
Before calling for Mr. Bankman-Fried’s bail to be revoked, the prosecutors had additionally requested Judge Kaplan to impose a gag order stopping the FTX founder from chatting with the media earlier than his trial.
Lawyers for Mr. Bankman-Fried mentioned that when he gave the paperwork to The Times, he was exercising his rights to reply “an inquiry from the media” and that he didn’t breach the phrases of his bail. The Times, the Reporters Committee for the Freedom of the Press and a documentarian making a movie about Mr. Bankman-Fried every submitted courtroom filings elevating First Amendment issues concerning the gag order.
Mr. Bankman-Fried was arrested within the Bahamas, the place FTX was primarily based, after the corporate imploded over a turbulent week in November. He was extradited to the United States and launched on extremely restrictive bail circumstances that required him to put on an ankle monitor and keep confined to his dad and mom’ home.
Since his launch, Mr. Bankman-Fried has been reprimanded repeatedly for habits that prosecutors mentioned pushed the boundaries of what he was allowed to do whereas awaiting trial.
In courtroom filings in January, the prosecutors offered proof that Mr. Bankman-Fried had despatched messages to a former FTX govt who might be a witness within the case. They additionally mentioned Mr. Bankman-Fried had used a digital non-public community, or VPN, to entry the web.
At the time, Judge Kaplan ordered Mr. Bankman-Fried to undergo tighter bail necessities that restricted which web sites he might entry and prevented him from speaking with former FTX workers. Visitors to his dad and mom’ home have been prohibited from bringing telephones or computer systems inside.
The Times’s article about Ms. Ellison included excerpts from non-public Google paperwork addressed to Mr. Bankman-Fried. At a courtroom listening to on July 26, the prosecutors argued that the article confirmed Mr. Bankman-Fried was searching for to intimidate and discredit a key authorities witness.
“No set of release conditions can assure the safety of the community,” Danielle Sassoon, one of many prosecutors, mentioned on the listening to. “The defendant has shown now that he is intent on exploiting the conditions of release and improperly influencing this trial.”
Santul Nerkar contributed reporting.
Source: www.nytimes.com