In a dramatic turn of events, a federal judge has revoked bail for Sam Bankman-Fried, co-founder of the cryptocurrency exchange FTX, citing probable cause that he attempted to tamper with witnesses in his ongoing fraud case.
Bankman-Fried, who has pleaded not guilty to multiple conspiracy and fraud charges, now faces the prospect of remaining in custody as his trial date looms closer.
The decision to revoke bail was handed down by US District Judge Lewis A. Kaplan, who expressed concern over Bankman-Fried’s alleged actions aimed at influencing potential witnesses against him.
Prosecutors had presented a series of violations, including Bankman-Fried’s purported contact with witnesses, his use of a virtual private network to evade monitoring, and his conversation with a reporter regarding former FTX executive Caroline Ellison.
Ellison, who is also Bankman-Fried’s ex-girlfriend, has taken a plea deal and is expected to testify against him.
The crux of the prosecutors’ case lay in Bankman-Fried’s alleged leaking of Ellison’s personal documents to the New York Times, facilitated by allowing a reporter to review the materials in person.
Judge Kaplan concurred with the prosecution’s assertion that such actions seemed geared toward tarnishing Ellison’s reputation, characterizing it as an attempt “to hurt, discredit and frighten the subject of the material.”
Bankman-Fried’s legal team argued that he had a legitimate right to defend his reputation in the media.
They emphasized the complex nature of his defense, involving an extensive volume of documents, which necessitated regular computer and internet access.
In an attempt to address potential concerns, Bankman-Fried’s lawyers had agreed to a gag order to limit his interactions with individuals outside the case. However, Judge Kaplan deemed this insufficient, given Bankman-Fried’s history of pushing boundaries.
Related Article: Coinbase Stands Tall: Requests US Judge To Dismiss SEC Lawsuit
FTX Co-Founder’s Trial Looms, Amidst Allegations and Media Battle
The FTX co-founder’s trial is scheduled for October, and he has maintained his innocence throughout the legal proceedings.
Despite legal advice to the contrary, Bankman-Fried has been actively engaging with the media, using various platforms to present his perspective on the downfall of FTX.
He has admitted to errors in judgment during his tenure as CEO but vehemently denies any deliberate involvement in fraud.
Prosecutors, on the other hand, have painted Bankman-Fried as the mastermind behind a massive financial fraud, accusing him of siphoning deposits from FTX to support risky ventures at his crypto hedge fund, Alameda Research.
They allege that these ill-gotten gains were also used to contribute to political campaigns and fund an opulent lifestyle for Bankman-Fried and his associates in the Bahamas.
Before its dramatic collapse, FTX had gained prominence as one of the largest cryptocurrency trading platforms globally, boasting celebrity endorsements and even featuring in Super Bowl commercials.
However, the company’s rapid downfall last November, triggered by concerns over its ties to Alameda Research, resulted in a bankruptcy filing and triggered a federal fraud investigation that has now ensnared its co-founder.
As the legal battle unfolds, the crypto world watches closely, with the outcome potentially shaping the future of cryptocurrency regulations and investor confidence in the burgeoning industry.