Sam Bankman-Fried, the entrepreneurial force behind the FTX cryptocurrency exchange, finds himself behind bars after a judge decided that there’s probable cause he attempted to manipulate witnesses in his ongoing fraud trial.
U.S. District Judge Lewis A. Kaplan withdrew the bail previously granted to Bankman-Fried, The Associated Press (AP) reports.
The revocation was a consequence of allegations by the prosecution that the FTX founder had made efforts to intimidate a pivotal witness in his case.
They cited instances, such as when he shared her private notes with a reporter and an encrypted message he dispatched to FTX’s chief legal officer.
Speaking on Bankman-Fried’s behalf, his legal team contended that his actions were in defense of his character, which had been under a cloud due to an onslaught of negative press.
They said that their client’s intention was not to tamper with witnesses but to shield his image.
Bankman-Fried, aged 31, had been residing under strict conditions at his family home in Palo Alto, California, ever since he was extradited from the Bahamas last December, AP notes.
He’s accused of duping his investors and illicitly shifting vast sums in cryptocurrency via the FTX platform.
The mogul’s bail, valued at a whopping $250 million, curtailed his digital and telephonic interactions.
The prosecution recently caught the defense off guard by advocating for his jailing.
They argued that Bankman-Fried transgressed the terms of his bail when he handed over personal writings of Caroline Ellison to The New York Times.
Ellison, once the head of Alameda Research, a crypto hedge fund linked with Bankman-Fried, and also his ex-partner, has herself admitted to crimes that could result in a 110-year prison term.
As part of her plea agreement, she will be testifying against Bankman-Fried.
“It is not surprising that the public wants to know more about who she is and what she did and that news organizations would seek to provide to the public timely, pertinent, and fairly reported information about her, as The Times did in its story,” said David McCraw, an attorney representing the Times.
The defense maintained that any effort by Bankman-Fried to salvage his reputation through the Times’ article was in vain, as the piece portrayed Ellison in a favorable manner.
They also challenged the prosecution’s claim regarding the extent of Bankman-Fried’s involvement in the story’s creation, arguing that the allegations against him are based on “innuendo, speculation, and scant facts.”
As the trial proceedings advance, Judge Kaplan has decreed a gag order, restricting any trial-associated person, including Bankman-Fried, from making public remarks.
