FTX crypto-clown Sam Bankman-Fried couldn’t even do house arrest. Now he’s in jail

Sam Bankman-Fried (SBF), former chief executive of crypto-disaster FTX, who has been awaiting trial for his firm’s failure while in home detention with his family, has been sent to jail for attempting to intimidate witnesses.

On Friday, at a hearing in New York City, Judge Lewis Kaplan revoked SBF’s bail based on American prosecutors’ concern that SBF was trying to tamper with the pending trial by sharing personal writings stored in Google Docs from Caroline Ellison, former CEO of FTX-affiliated Alameda Research and a former romantic partner, with the New York Times.

Following the judge’s ruling, as noted by Inner City Press, US Marshals removed SBF’s jacket, tie, and shoelaces, and took the former exec into custody in handcuffs. He is expected to be taken to the Metropolitan Detention Center in Brooklyn, New York.

Shortly after SBF’s arrest in The Bahamas in December, 2022, a month after the bankruptcy of FTX, Ellison and Gary Wang, former CTO and co-founder of FTX, pleaded guilty to defrauding FTX investors and agreed to cooperate with the US government in its prosecution of SBF.

The New York Times, on July 20, 2023, published an article titled, “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case.” The article incorporated material about Ellison provided by SBF.

That same day, government prosecutors wrote a letter [PDF] to Judge Kaplan asking him to intervene.

“The defendant’s purpose in sharing these materials is plain,” the US attorneys wrote. “Ellison has pleaded guilty to a cooperation agreement and is expected to testify at trial that she agreed with the defendant to defraud FTX’s customers and investors, and Alameda’s lenders.

“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defense through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone.”

SBF’s attorneys argued that SBF’s contact with the press was allowed under the First Amendment, a claim the government rejected because witness tampering is not protected speech.

Amid the filings and counter-filings by the government and the defense prior to the hearing, the Feds also cited SBF’s use of a VPN, ostensibly to watch sports, which they say thwarted monitoring conditions imposed by the court.

“There also is some irony to the defendant’s claim that the use of a VPN is not ‘inherently deceptive,’ when his proffered justification for using the VPN appears to be that it allowed him to deceive the National Football League and access a subscription service that does not permit viewing in the United States,” Uncle Sam’s legal eagles said in an August 3, 2023 letter [PDF].

SBF’s legal team has already filed an appeal to overturn Judge Kaplan’s decision. The former exec faces two trials, one scheduled for October, and a second, based on subsequent bribery charges, set for March 2024. ®

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