Indicted FTX founder Sam Bankman-Fried was hauled off to jail Friday after a federal judge revoked the fallen crypto king’s bail for allegedly leaking his ex-girlfriend’s love letters.
US District Judge Lewis Kaplan sided with federal prosecutors who argued that Bankman-Fried had jeopardized his upcoming trial by leaking the personal writings of his former lover and business associate Caroline Ellison to a New York Times reporter.
Kaplan determined there was probable cause to believe Bankman-Fried had tried to “tamper with witnesses at least twice” since his December arrest for fraud.
Bankman-Fried’s defense attorney Mark Cohen said his team would appeal the incarceration order. Kaplan rejected the defense’s request for an immediate stay pending the outcome of the appeal.
The defense team accused prosecutors of pushing for Bankman-Fried’s jailing based on “innuendo, speculation, and scant facts.”
Bankman-Fried, 31, had been held under house arrest at his parents’ mansion in Palo Alto, Calif. on $250 million bond.
He was shipped off to the Manhattan Detention Complex in Lower Manhattan, where the former billionaire will be locked up until the start of the trial on Oct. 2.
He has pleaded not guilty of having allegedly misused billions in FTX customer funds to fund a lavish lifestyle and prop up risky bets at Alameda before his cryptocurrency empire collapsed last year.
The feds previously stated that the disgraced wonderboy had “crossed a line” and harassed Ellison, the former CEO of Bankman-Fried’s doomed cryptocurrency hedge fund Alameda Research.
Ellison has already pleaded guilty to fraud and is expected to be a key witness as Bankman-Fried faces trial for allegedly FTX bilking customers out of billions.
Cohen had said his team had been blindsided by the prosecutors’ motion and argued that Bankman-Fried’s bail terms permitted him to speak with the media.
Cohen reminded the court that Bankman-Fried’s bail terms allowed him to speak with reporters, and to stop that would be infringing on his right to speak to the press.
Cohen also noted that his client has had “many, many negative stories” published about him and his relationships and argued Bankman-Fried’s media outreach was meant “to protect his reputation” ahead of the trial.
At a July 26 hearing, Kaplan had restricted Bankman-Fried from speaking publicly about his case, and asked both sides to address whether jail was necessary.
The gag order has drawn attention from news media, including the Times, which in an Aug. 2 letter to the judge said the measure should be loosened to only restrict comments that could interfere with a fair trial.
A July 20 article in the newspaper contained excerpts from Ellison’s personal Google documents prior to FTX’s collapse.
She described being “unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her personal breakup with Bankman-Fried.
In the writings, which dated back prior to FTX’s downfall, Ellison fretted about her on-again, off-again relationship with Bankman-Fried and its impact on their working environment.
In one entry from February 2022, Ellison reportedly wrote that they risked “making things weird” and “causing drama” at the company and worried that “it doesn’t really feel like there’s an end in sight,” the Times reported.
In another post addressed to Bankman-Fried in April 2022, Ellison wrote that an earlier breakup with him had “significantly decreased my excitement about Alameda.”
She added that she “felt too associated with [Bankman-Fried] in a way that was painful.”
Ellison and two other former FTX executives, Nishad Singh, and Gary Wang, have agreed to cooperate in the case against Bankman-Fried.
Bankman-Fried is alleged to have misused billions in FTX customer funds to fund a lavish lifestyle and prop up risky bets at Alameda.