Sam Bankman-Fried Jailed Ahead of Trial

• A judge revoked FTX founder Sam Bankman-Fried’s bond Friday, sending him to jail ahead of his trial in October.
• Bankman-Fried faces seven different charges tied to the collapse of FTX, including wire, commodities and securities fraud.

NEW YORK — FTX founder Sam Bankman-Fried was sent to jail ahead of his October trial on multiple financial crime charges after a federal judge revoked his release on bond Friday afternoon, saying the former crypto heavyweight appears to have tried to tamper with witnesses.

Bankman-Fried is willing “to risk crossing the line in an effort to get right up to [the line], wherever it is,” said Judge Lewis Kaplan, of the U.S. District Court for the Southern District of New York, later concluding: “All things considered I’m going to revoke bail.”

He added: “My conclusion is there is probable cause to believe the defendant has attempted to tamper with witnesses at least twice. … There is a rebuttable presumption that there is no set of conditions that will ensure Bankman-Fried will not be a danger.”

Barbara Fried and Joseph Bankman, Bankman-Fried’s parents, were present during the hearing. Fried quietly cried after the judge’s ruling.

Bankman-Fried, the 31-year-old former CEO of crypto exchange FTX , appeared in court on Friday after the U.S. Department of Justice moved to send him back to jail on allegations of violating the terms of his bond by trying to tamper with multiple witnesses. According to the DOJ, Bankman-Fried’s reaching out to former FTX.US general counsel Ryne Miller and using a virtual private network to, in the words of his defense team, watch the Super Bowl, were enough to require a modification of his bail conditions. The last straw, however, was Bankman-Fried’s sharing part of former Alameda Research CEO Caroline Ellison’s private diary with the New York Times.

Judge Kaplan cited both attempts to contact former FTX employees in a lengthy verbal order.

While the use of a VPN in and of itself may not be overly significant, it speaks to Bankman-Fried’s mindset, he said.

Bankman-Fried’s defense team admitted he shared some diary pages with the Times, though his attorneys disputed that he was trying to tamper with a witness.

“Here we have a very thin record with a lot of spin,” his lawyer told the judge.

The defense team also argued that jailing Bankman-Fried would make it more difficult to prepare for his trial.

Judge Kaplan wasn’t convinced by these arguments: “I don’t think that the revocation is quite the insurmountable problem.”

During the hearing, Assistant U.S. Attorney Danielle Sassoon argued that detaining Bankman-Fried was further warranted by the fact that he was increasingly visiting New York for pre-trial conferences and trial preparation.

“He’s effectively unsupervised while he’s here,” she said.

The DOJ also had alternative options in case the judge rejected detaining Bankman-Fried outright. The government would have been OK with home incarceration, banning all visitors and blocking all internet access except for two databases needed to prepare for trial.

This would have included blocking Google Drive, Sassoon said, noting that Ellison’s diary was part of the Drive files Bankman-Fried had access to.

Mark Cohen, Bankman-Fried’s attorney, tried arguing that there was insufficient legal basis to jail him ahead of trial, and that the standards set by precedent cases had not been met.

“The only reason we know about [Bankman-Fried meeting with a Times reporter] is because he was complying with his bail conditions,” Cohen said.

Sassoon, the prosecutor, disagreed.

“I think the fact the defendant was more subtle in his methods than a mobster doesn’t mean it was benign,” she said.

Bankman-Fried is currently set to go on trial at the start of October on wire fraud, commodities fraud, securities fraud, money laundering and related conspiracy charges. He faces another trial, tentatively scheduled for next March, on additional charges brought by the DOJ after Bankman-Fried’s arrest and extradition.

Certain pretrial motions from both the prosecution and the defense are due to the court by Monday, Aug. 14.

Attorneys from both the defense and the prosecution said they were on track to meet next week’s deadlines.

Bankman-Fried’s lawyers said they would appeal the decision, and motioned to stay the revocation of the bail until that appeal was heard. The judge rejected the stay.

Bankman-Fried’s going to jail ahead of his trial does not mean he will go to prison after it. He would need to be found guilty of at least one of the charges laid against him, and sentenced to prison after.

UPDATE (Aug. 11, 2023, 20:15 UTC): Updated with details throughout.

UPDATE (Aug. 11, 2023, 21:30 UTC): Adds additional detail.

Edited by Nick Baker and Nelson Wang.