Sam Bankman-FriedThe founder of collapsed cryptocurrency exchange FTX was ordered to jail on Friday after a federal judge in New York revoked his bail, in a dramatic turn less than two months before the case was due to go to trial.
Mr Bankman-Fried, 31, was placed under house arrest at his parents’ home in Palo Alto, California, because he was arrested in december on allegations of fraud arising from the explosion of FTX. But at Friday’s hearing, Judge Lewis A. Kaplan of the Federal District Court in Manhattan said the arrangement must be ended, after prosecutors argued that Mr. Bankman-Fried had given the documents to the media to intimidate a witness in the case.
The decision was the latest extraordinary development in one of the most dramatic corporate implosions in recent memory. Before filing for bankruptcy following a drop in deposits last fall, FTX rocketed the cryptocurrency market to become one of the leading companies in the industry. In a matter of weeks, Mr. Bankman-Fried went from industrialist, favorite of politicians and celebrities, to criminal defendant jailed for decades.
Now he has to prepare for the trial from the jail cell. The courtroom dispute centered on his bail An article in the New York Times was published last month detailing the private writings of Carolyn Ellison, an executive in Mr Bankman-Fried’s business empire who also dated him. Ms Ellison has pleaded guilty to fraud charges and has agreed to cooperate with prosecutors investigating Mr Bankman-Fried.
In court filings, prosecutors said Mr Bankman-Fried had given the documents to The Times to intimidate Ms Ellison by showing them negatively ahead of her trial in October. He also noted that Mr. Bankman-Fried has had several conversations with other journalists, including author Michael Lewis, who is writing a book about FTX that is set for publication in the week the trial begins.
Before seeking to revoke Mr Bankman-Fried’s bail, prosecutors also asked Judge Kaplan to impose a gag order preventing the FTX founder from speaking to the media ahead of his trial.
Mr Bankman-Fried’s lawyers said when he gave the documents to The Times, he was exercising his rights to respond to “enquiries from the media” and had not breached his bail conditions. The Times, the Reporters Committee for Freedom of the Press and a documentary filmmaker making a film about Mr Bankman-Fried have petitioned the court. The First Amendment concerns about gag orders.
Santol Nerkar Contributed reporting.
