FTX founder Sam Bankman-Fried leaves Federal court, Wednesday, July 26, 2023, in New York. (AP Photo/Mary Altaffer)
Sam Bankman-Fried, the onetime crypto billionaire now facing federal criminal fraud charges, is headed to jail.
U.S. District Judge Lewis Kaplan revoked Bankman-Fried’s bail on Friday, citing what he says is “probable cause” to believe he has attempted to tamper with witnesses, in violation of federal law, at least twice, according to reports from the courtroom.
“Bond as to Samuel Bankman-Fried [r]evoked and defendant ordered remanded,” Kaplan’s order said, according to the case docket after the hearing. “Defendant moved to stay the Court’s ruling on pending appeal, which was denied by the Court.”
The detention order was arguably a long time coming as Kaplan had expressed skepticism for months about Bankman-Fried’s actions while on pretrial release.
In February, Kaplan asked prosecutors why they hadn’t asked to put Bankman-Fried in pretrial detention, remarking at the time that there might be “probable cause to believe” that the defendant may have committed a “federal felony” while on release on a $250 million pretrial bond, namely attempted and actual “witness tampering.” The judge was specifically referring to multiple instances of Bankman-Fried’s encrypted communications and web surfing while released to his parents’ home in California after his indictment.
At the time, the government argued that the bail terms be modified to restrict Bankman-Fried from computers and internet access.
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In July, Kaplan had previously warned Bankman-Fried to take seriously the gag order limiting his communications. That order came after prosecutors alleged that Bankman-Fried leaked diaries written by his former girlfriend — and a looming star witness at his massive fraud trial later this year — to the New York Times. Kaplan’s gag order also prohibited Bankman-Fried from causing others, including surrogates or family members, spokespeople or other representatives from making statements on his behalf.
According to courtroom reporting from Inner City Press, Kaplan acknowledged that Bankman-Fried has a First Amendment right to try to mitigate some of the bad press he has received, but it seemed to him that Bankman-Fried’s communications were intended to have potential witnesses back off. Kaplan called the documents personal and intimate, Inner City Press reported, and that they are something an intimate partner would be unlikely to share with anyone except to hurt and frighten someone.
Bankman-Fried was indicted in December on eight counts including wire fraud, conspiracy and campaign finance violations. The Department of Justice and the Securities and Exchange Commission claim that the 30-year-old cryptocurrency mogul raised more than $1.8 billion from investors in his since-failed FTX cryptocurrency exchange while allegedly diverting his customers’ money to Alameda Research LLC, his privately-held hedge fund. He pleaded not guilty in January. According to a superseding indictment issued in March, Bankman-Fried allegedly directed payments to Chinese officials of at least $40 million in cryptocurrency bribes for them to unfreeze his accounts.
Bankman-Fried purportedly became a billionaire as the exchange was marketed to a mass audience: FTX famously advertised during the Super Bowl, with a guest appearance by Curb Your Enthusiasm’s Larry David, who has now been sued for his appearance in the ad. Several other celebrities and athletes who lined up to lend their names to the FTX brand — including quarterback Tom Brady, model Gisele Bündchen, basketball legend Shaquille O’Neal and others — are now David’s co-defendants in a federal lawsuit.
Bankman-Fried also aggressively courted Capitol Hill, often with strategic political donations and expressing openness to federal authorities regulating his industry. He had also testified before the House Financial Services Committee and the U.S. Senate Committee on Agriculture, Nutrition and Forestry, and was slated to appear at a congressional hearing about the November 2022 collapse of FTX that had been scheduled just days after his arrest.
Adam Klasfeld contributed to this report.
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