A US federal judge sent FTX founder Sam Bankman-Fried back to jail on Friday, less than two months before his fraud trial. The judge took away his bail because he is thought to have tried to influence witnesses. Hopefully, for him, this isn’t to have him Epsteined.
Bankman-Fried, 31, has pleaded not guilty to accusations of wire fraud, conspiracy to commit money laundering, and election finance violations stemming from his crypto firm’s stunning collapse last year.
In November, FTX and Alameda Research went bankrupt. This ended a virtual trading operation that was worth $32 billion, according to the market.
The revocation of bail was justified by US District Judge Lewis Kaplan noting “probable cause… that the defendant has committed the federal crime of attempted witness tampering,” according to the ruling.
“There is no condition or combination of conditions of release that will assure that the defendant will not pose a danger to other persons or the safety of the community,” the ruling stated.
Prosecutors had contended to Kaplan that Bankman-Fried’s activities as a source for The New York Times constituted to witness intimidation, citing a story including private writings of his former girlfriend, former Alameda CEO Caroline Ellison.
VISIT OUR YOUTUBE CHANNELIn the government’s case, Ellison is a cooperating witness.
Prosecutors accused Bankman-Fried of “intending to portray a key cooperator testifying against him in a poor and inculpatory light,” according to a July 28 letter filed by the Department of Justice.
Bankman-Fried had “crossed a line toward improperly influencing those prospective jurors and intimidating a witness and sending a message to other prospective witnesses,” according to the complaint.
“Witness tampering is not constitutionally protected speech.”
In response, Bankman-Fried’s attorneys claimed that the government’s position violated the First Amendment and that imprisoning the defendant would jeopardize his capacity to defend himself.
Bankman-Fried is scheduled to stand trial in early October on claims that he ordered bribes of at least $40 million to Chinese officials in order to unfreeze trade accounts held by Alameda.
Prosecutors claim Bankman-Fried duped investors and misappropriated assets belonging to FTX and Alameda Research clients before being released on $250 million bail and restricted to his parents’ California home on Friday.
The former FTX CEO had appeared on the covers of finance and technology journals, with Fortune comparing him to Warren Buffett, and had attracted significant investments from notable fund managers and venture capitalists.
But it all came crashing down when a media revelation revealed that Alameda’s balance sheet was mainly based on a token produced by FTX with no independent worth — exposing Bankman-Fried’s enterprises as dangerously intertwined. In other words, Bankman-Fried was selling tokens to customers, but there were no tokens. It was a scam from the very beginning.
And don’t forget that FTX donated money to a Ukraine fund, only to somehow miraculously get the Ukrainian government to invest in FTX. Bankman-Fried then used that money to fund all the Democrats’ campaigns for the 2022 midterm elections.
