New Delhi: A federal judge in New York City has revoked the bail of the bankrupt FTX cryptocurrency exchange founder Sam Bankman-Fried on grounds of attempting to influence witnesses who are set to testify against him on trial in October, The New York Times reported late on Friday.
Bankman-Fried had been arrested in December, in the wake of the bankruptcy of the cryptocurrency exchange FTX. Living in the Bahamas at the time, Bankman-Fried was charged with misappropriation of funds deposited by customers with FTX for his personal use and for political contributions, as well as misleading investors of both FTX and sister trading firm Alameda Research.
Bankman-Fried was subsequently released on bail in December last year on a $250 million bond, including conditions that he remain in his parents’ California residence and wear an ankle monitor, The New York Times reported at the time.
According to CNN, Judge Lewis A. Kaplan of Manhattan’s District Court had tightened Bankman-Fried’s bail conditions over a “material threat of inappropriate contact with potential witnesses” that could be tantamount to witness tampering.
Eight months on from Bankman-Fried’s arrest, Judge Kaplan has now ordered for a revocation of the bail, citing probable cause that Bankman-Fried has attempted to interfere with witnesses by continuing such inappropriate contact that could influence their testimonies in October.
“He has already — without violating any other bail condition save that he not commit another crime — gone up to the line over and over again,” Judge Kaplan stated at a hearing on Bankman-Fried’s bail on Friday.
Among Bankman-Fried’s conversations deemed as inappropriate by prosecutors during the bail hearing include those with author Michael Lewis, of Moneyball and The Big Short fame, who is currently writing a book about FTX.
But the smoking gun of witness interference appeared to be Bankman-Fried’s sharing with The New York Times the private writings of former Alameda Research CEO Caroline Ellison, a key witness who previously dated Bankman-Fried.
Some of Ellison’s writings were published by the Times in July, revealing “personal and raw” Google Documents notes reflecting Ellison’s self-doubts over her position at Alameda and the emotions associated with their breakup.
In the eyes of the prosecutors, Bankman-Fried leaked these personal writings in order to “harass Ellison and dissuade others from testifying” by sharing such personal information that could cast them in a negative light. Ellison had previously pleaded guilty and agreed to cooperate with prosecutors in December, the Times had reported.
Following the revocation of his bail, Bankman-Fried was taken to Brooklyn’s Metropolitan Detention Center, a location with limited internet access where he is expected to remain in the short term, amid deliberations over whether he should be transferred to a different facility, the Times report added.
(Edited by Tony Rai)