In a significant turn of events, Sam Bankman-Fried, the founder of FTX, has been denied bail by Judge Lewis Kaplan. Federal prosecutors had requested the revocation of Bankman-Fried’s bail over allegations of witness tampering, and the judge sided with their argument. As a result, Bankman-Fried is set to be remanded to custody immediately and will remain in jail until his criminal trial commences on October 2.
Probable Cause for Witness Tampering
During the court hearing, Judge Kaplan stated that there was probable cause to believe that Bankman-Fried had attempted to tamper with witnesses on multiple occasions. This conclusion forms the basis of his ruling to deny the defendant’s request for delayed detention pending an appeal. As court marshals led Bankman-Fried into custody, he went through the process of removing his blazer, tie, and shoes, while his parents watched from the gallery, visibly distressed.
Bankman-Fried’s appearance in court marks the latest in a series of pre-trial hearings surrounding his interactions with the press. The Justice Department has characterized these exchanges as a “pattern of witness tampering and evading his bail conditions.” In July, Judge Kaplan had already issued a clear warning to Bankman-Fried regarding his discussions with the media.
Disputes over Free Speech
Members of the press, including representatives from The New York Times and the Reporters Committee for Freedom of the Press, objected to Bankman-Fried’s detention, citing concerns about free speech. Defense attorneys argued that Bankman-Fried was exercising his first amendment rights and had not violated any bail conditions by speaking with journalists. However, the judge’s ruling indicates that the prosecution convinced him that Bankman-Fried’s leaked private diary entries of his ex-girlfriend were an attempt to harm and discredit a witness.
The Impact on the Defense’s Case
Bankman-Fried’s defense team had hoped that the discovery process would bolster his case. They argued that, without access to a computer with internet capabilities, Bankman-Fried would be unable to adequately prepare for trial due to the substantial volume of discovery documents. However, the government’s motion for detention presented evidence of Bankman-Fried’s extensive communication with the media, including over 100 emails and more than 1,000 phone calls.
Witness Cooperation and Indirect Intimidation
Caroline Ellison, Bankman-Fried’s ex-girlfriend and former CEO of his failed crypto hedge fund, Alameda Research, has been cooperating with the government since December and is expected to be a crucial witness for the prosecution. The prosecution argued that Bankman-Fried’s actions were an attempt to intimidate Ellison indirectly through the press. They highlighted his numerous phone calls with one of the authors of The New York Times article, many of which lasted around 20 minutes.
Revoked Bail Conditions
As a result of the judge’s ruling, Bankman-Fried’s bail conditions have been revised. He will now have restricted internet access and will be banned from using smartphones. The prosecution contended that these measures were necessary to limit his ability to engage in further manipulations.
Looking Ahead to the Trial
Bankman-Fried’s journey to jail marks another setback for the former billionaire. As his criminal trial approaches, Bankman-Fried will have to strategize from a position of confinement. The government plans to file a new superseding indictment next week after having already amended the charges twice to comply with an extradition agreement signed with The Bahamas, where Bankman-Fried was previously held in custody.
Sam Bankman-Fried’s bail has been revoked as a result of alleged witness tampering. While his defense team argued for his first amendment rights and access to necessary documents, Judge Kaplan determined that there was probable cause for such charges. As the trial approaches, Bankman-Fried faces significant obstacles in his quest for a favorable outcome.
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