Bombshell: Judge Sends Him to Jail

( – HAPPENING NOW: FTX founder Sam Bankman-Fried was jailed on Friday when a federal judge, US District Judge Lewis Kaplan, revoked his bail.

The decision was made after allegations that Bankman-Fried leaked his ex-girlfriend, Caroline Ellison’s personal letters to a reporter from the New York Times. Federal prosecutors believed this action threatened his upcoming trial.

Judge Kaplan found it likely that Bankman-Fried had attempted to “tamper with witnesses at least twice” since his arrest for fraud in December.

Defense attorney Mark Cohen announced plans to appeal in response to the ruling.

Despite requests from the defense for an immediate stay pending the appeal’s result, Kaplan denied it. The defense accused prosecutors of making their recommendation based on “innuendo, speculation, and scant facts.”

Before the decision, Bankman-Fried, 31, was on house arrest at his parents’ Palo Alto mansion with a $250 million bond. Following the judge’s order, he was sent to the Manhattan Detention Complex and is expected to remain there until his trial starts on October 2.

Bankman-Fried is accused of misusing billions of FTX customer funds for personal luxury and covering risky investments at Alameda. He has denied these charges. Federal authorities previously said he had “crossed a line” in harassing Ellison, once the CEO of his cryptocurrency hedge fund Alameda Research.

Ellison, who had pleaded guilty to fraud, is slated to be a crucial witness in the case against Bankman-Fried.

Cohen expressed surprise at the prosecutors’ motion and stated that the terms of Bankman-Fried’s bail allowed him to communicate with journalists. He emphasized that preventing his client from doing so would violate his rights. Cohen further remarked on the negative press his client received, suggesting the communications were to safeguard Bankman-Fried’s reputation before trial.

On July 26, Kaplan had limited Bankman-Fried from public discussions about his case and questioned the necessity of incarceration. This restriction attracted media attention. On August 2, the Times suggested narrowing the order only to limit statements that could affect a fair trial. An earlier July 20 article in the newspaper had shared extracts from Ellison’s personal Google documents. In these, Ellison expressed her emotional and professional challenges concerning her relationship with Bankman-Fried.

Ellison’s writings from 2022 detailed the complexities of their relationship and its effects on their professional lives. For instance, she once wrote about the possibility of “making things weird” and “causing drama” at their company. In another entry, she noted a decreased enthusiasm for Alameda after a breakup with Bankman-Fried.

Ellison and former FTX executives Nishad Singh and Gary Wang have committed to assisting in the case against Bankman-Fried.