Sam Bankman-Fried, the founder of collapsed cryptocurrency exchange FTX, was ordered to prison on Friday after a federal judge in New York revoked his bail, marking a dramatic turn less than two months into the trial.
31 year old Mr. Bankman-Fried was placed under house arrest at her parents’ home in Palo Alto, California. He was arrested in December on fraud charges stemming from the FTX explosion. But at a hearing on Friday, Judge Louis A. of Federal District Court in Manhattan Mr. Kaplan, to intimidate the witness of the case. Bankman-Fried said the arrangement had to end after prosecutors argued she had provided documents to the media.
“He has gone over the line again and again and I’m going to revoke bail,” Mr Justice Kaplan said after reading his verdict from the bench. said of Bankman-Fried.
After the order was read aloud, two U.S. Marshals escorted Mr. Bankman-Fried was made to take off his navy suit jacket. His mother, Barbara Fried, tried to approach him but was warned to back off by a court official. Mr. Bankman-Fried was taken to the Metropolitan Detention Center in Brooklyn.
Mr. Bankman-Fried’s attorney told the court she plans to appeal.
The courtroom scene is the latest development in one of the most shocking corporate implosions in recent memory. Before filing for bankruptcy last fall after a run on deposits, FTX became one of the industry leaders in the cryptocurrency market. Within a few weeks, Mr. Bankman-Fried went from a titan of industry adored by politicians and celebrities to a convicted felon who spent decades behind bars.
He now has to prepare for his trial from jail on October 2. The court dispute over his bail focused on a New York Times article published last month that said Mr. Describes the personal writings of Carolyn Ellison, an executive in Bankman-Fried’s business empire. Mrs. Ellison pleaded guilty to fraud charges, and Mr. Bankman-Fried has agreed to cooperate with prosecutors.
In court filings, the lawyers, Mr. Bankman-Fried said she provided the documents to The Times ahead of her trial to intimidate Ms. Ellison by portraying her in a negative light. Mr. Bankman-Fried has had several conversations with other journalists, and she is writing a book about FTX, by author Michael Lewis, which will be published the week the trial begins.
Mr. Before calling for Bankman-Fried’s bail to be revoked, prosecutors asked Judge Kaplan to impose a gag order barring the FTX founder from speaking to the media before his trial.
Mr. Bankman-Fried’s attorneys said that when she gave the documents to the Times, she was exercising her right to respond to “an inquiry from the media” and that she had not violated the terms of her bail. The Times, Reporters Group for Freedom of the Press and Mr. A documentary about Bankman-Fried and a movie in the making each filed court filings that raised First Amendment concerns about the gag order.
In the Bahamas, where FTX was based, Mr. Bankman-Fried was arrested. He was extradited to the United States and released on very restrictive bail conditions requiring him to wear an ankle monitor and be confined to his parents’ home.
Since his release, Mr. Bankman-Fried was repeatedly reprimanded for behavior that prosecutors said pushed the boundaries of what he was allowed to do while awaiting trial.
In court filings in January, Mr. Prosecutors presented evidence that Bankman-Fried sent the messages. They also said Mr Bankman-Fried used a virtual private network, or VPN, to access the internet.
At the time, Judge Kaplan said Mr. Bankman-Fried was ordered to submit to strict bail requirements, which restricted which websites he could access and prevented him from communicating with former FTX employees. Visitors to his parents’ home were banned from bringing phones or computers inside.
Mrs. In a Times article about Ellison, Mr. Includes excerpts from personal Google Docs sent to Bankman-Fried. At a court hearing on July 26, Mr. Prosecutors argued that the article showed that Bankman-Fried attempted to
“No release conditions can ensure the safety of the community,” Daniel Sassoon, one of the prosecutors, told the hearing. “The defendant has now shown that he intended to take advantage of the conditions of release and improperly influence this investigation.”
Saint Nergar Contributed report.