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HomeGlobal NewsFTX's Sam Bankman-Fried jailed after bail revoked – DW – 08/11/2023

FTX’s Sam Bankman-Fried jailed after bail revoked – DW – 08/11/2023

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A US district court ordered the founder of FTX, Sam Bankman-Fried, to be remanded into custody before his trial.

Bankman-Fried had been under house arrest while waiting trial on fraud charges handed down last year after the implosion of cryptocurrency firm FTX, and its sister hedge fund, Alameda Research, in November 2022. 

The virtual trading businesses at one point had been valued by the market at $32 billion (€29.2 billion).

Bankman-Fried had previously pleaded not guilty to stealing billions from FTX customer funds to cover Alameda Research hedge fund losses.

FTX’s collapse was triggered by reports that Bankman-Fried had used customer deposits on the platform to trade with hedge fund Alameda Research.

Crypto outlet Coindesk reported on November 2 that much of Alameda’s assets were tied in FTX’s signature coin, FTT, raising concerns about the value of the assets based on the coin.

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Why was Bankman-Fried’s bail revoked?

On Friday, Judge Lewis Kaplan revoked the $250 million bail package, after finding probable cause that Bankman-Fried tampered with witnesses at least twice.

Prosecutors said that Bankman-Fried provided private writings from a former girlfriend, Caroline Ellison, for an article published in the New York Times. Ellison had worked at Alameda Research, and is a cooperating witness in the government’s case.

In another instance, Bankman-Fried contacted  FTX’s general counsel with an encrypted communication.

The judge ruled there was a probability that Bankman-Fried had tried to influence anticipated trial witnesses “and quite likely others whose names we don’t even know” to get them to “back off, to have them hedge their cooperation with the government.”

Bankman-Fried was placed in handcuffs and detained after the ruling. He will remain in custody at least until the start of his October fraud trial.

A defense lawyer said an appeal of the incarceration order would be filed.

lo/wmr (AP, Reuters,AFP)

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