FTX founder Sam Bankman-Fried’s bail revoked over witness tampering claim

Sam Bankman-Fried’s bail was revoked ahead of his October fraud trial, a US judge said on Friday, after prosecutors accused the indicted founder of the bankrupt cryptocurrency exchange FTX of tampering with witnesses.

Judge Lewis Kaplan announced the decision at a hearing over Bankman-Fried’s bail conditions in federal court in Manhattan.

Federal prosecutors in Manhattan first made their surprise request to jail the former billionaire in a 26 July 2023 hearing, saying he “crossed a line” by sharing his former romantic partner Caroline Ellison’s personal writings with a New York Times reporter.

Bankman-Fried, 31, has pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund, where Ellison was chief executive.

His lawyers said prosecutors mischaracterized his intentions in sharing Ellison’s writings, arguing he wanted to defend his reputation and that he had a right to speak to the press.

Kaplan said he had concluded there was probable cause to believe Bankman-Fried had tried to “tamper with witnesses at least twice” since his December arrest.

A defense lawyer said an appeal of the incarceration order would be filed and asked for an immediate stay of the order.

Bankman-Fried has been largely confined to his parents’ home in Palo Alto, California, on $250m bond since his December 2022 arrest.

In the 26 July hearing, Kaplan restricted Bankman-Fried from speaking publicly about his case, but asked both sides to submit written arguments on whether to detain him.

Ellison and two other former members of Bankman-Fried’s inner circle have pleaded guilty to fraud and agreed to cooperate with the US ttorney’s Office in Manhattan. She is expected to testify against him at his scheduled 2 October trial.

The gag order has drawn attention from news media, including the Times, which in a 2 August letter to the judge said the measure should be loosened to only restrict comments that could interfere with a fair trial.

A 20 July article in the newspaper contained excerpts from Ellison’s personal Google documents prior to FTX’s collapse.

She described being “unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her personal breakup with Bankman-Fried.