Federal prosecutors requested the former cryptocurrency tycoon be jailed before trial, saying he had ‘crossed a line’.
Sam Bankman-Fried’s bail has been revoked ahead of his October fraud trial after prosecutors accused the indicted founder of bankrupt cryptocurrency exchange FTX of tampering with witnesses.
United States District Judge Lewis Kaplan announced the decision on Friday at a hearing over Bankman-Fried’s bail conditions in federal court in Manhattan.
Prosecutors first made their request to jail the former billionaire in a July 26 hearing, saying he “crossed a line” by sharing former romantic partner Caroline Ellison’s personal writings with a New York Times reporter.
Bankman-Fried, 31, has pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund, where Ellison was chief executive.
His lawyers said prosecutors mischaracterized his intentions in sharing Ellison’s writings, arguing he wanted to defend his reputation and he had a right to speak to the press.
Bankman-Fried has been largely confined to his parents’ Palo Alto, California, home on $250m bond since his December arrest.
Ellison and two other former members of Bankman-Fried’s inner circle have pleaded guilty to fraud and agreed to cooperate with the US Attorney’s Office in Manhattan. Ellison is expected to testify against Bankman-Fried at his trial, scheduled to begin on October 2.
At the July 26 hearing, Kaplan restricted Bankman-Fried from speaking publicly about his case.
The gag order has drawn attention from news media, including the Times, which in an August 2 letter said Bankman-Fried should be restricted only from making comments that could interfere with a fair trial.
A July 20 article in the newspaper contained excerpts from Ellison’s personal Google documents written prior to FTX’s collapse.
She described being “unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her personal breakup with Bankman-Fried.
