According to a report from CoinDesk, FTX founder Sam Bankman-Fried was directed to jail prior to his October trial on several financial crime charges after a federal judge rescinded his release on bond Friday afternoon, saying that Bankman-Fried appears to have tried to intimidate witnesses.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."
Judge Kaplan 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, attended the hearing. Fried silently sobbed after the judge gave his ruling.
Bankman-Fried, the 31-year-old former CEO of crypto exchange FTX , appeared in court on Friday, August 11th after the United States Department of Justice(DOJ) moved to send him back to jail due to allegations of tampering with multiple witnesses, which is a violation of the terms of his bond.
According to the DOJ, Bankman-Fried's contacting 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 sufficient to require an adjustment of his bail conditions. The “nail in the coffin”, however, was Bankman-Fried's sharing part of former Alameda Research CEO Caroline Ellison's private diary with the New York Times.
Judge Kaplan pointed to 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 greatly outstanding, it speaks to Bankman-Fried’s mindset, he said.
Bankman-Fried's defense team conceded that he shared some diary pages with the Times, though his attorneys contended the suggestion that he was seeking to tamper with a witness.
“Here we have a very thin record with a lot of spin,” his attorney expressed to the judge.
The defense team also argued that jailing Bankman-Fried would make it more burdensome to ready themselves for 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 United States Department of Justice also had alternative options in case the judge denied detaining Bankman-Fried outright. The government would have settled with house-arrest, barring all visitors and obstructing all internet access except for two databases necessary for preparing for trial.
Sassoon added that the Putnam County Correctional Facility was prepared to offer Bankman-Fried, who also goes by “SBF," a laptop should the judge order him remanded but also suggested home detention with restrictions on Google Drive was an option. pointing to the fact that Ellison’s diary was part of the Drive files Bankman-Fried had access to.
Mark Cohen, Bankman-Fried’s attorney, attempted to argue that there was not sufficient legal basis to jail him prior to 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.
Prosecutor Sassoon 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, August 14th, 2023.
Attorneys from both the prosecution and the defense stated they were on schedule 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 before his trial does not dictate that 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.
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