The request for bail from Sam Bankman-Fried, the CEO of the now-defunct cryptocurrency exchange FTX, has been denied, and he is now facing imprisonment for alleged witness tampering.
Manhattan District Court Judge Lewis Kaplan announced this decision during a hearing on Friday (Aug 11), which occurred less than two months before the scheduled October fraud trial.
Judge Kaplan stated during the hearing that there is sufficient reason to believe that the defendant attempted to tamper with witnesses on at least two occasions.
Sam Bankman-Fried’s legal team has stated their intention to appeal this decision.
The 31-year-old founder, who has been disgraced, has been under house arrest at his parents’ residence in Palo Alto, California, after facing charges by the US government last year, accusing him of being involved in one of the largest financial fraud cases in US history.
He has been residing at his parents’ house since his arrest in December 2022, after posting a $250 million bond.
He is accused of embezzling billions of dollars from FTX customer funds to cover losses at his Alameda Research hedge fund.
If found guilty of these charges, the billionaire could potentially receive a life sentence.
Government prosecutors aimed to have his bail revoked, and they requested that the cryptocurrency entrepreneur be detained in prison until his trial, alleging that he tampered with witnesses.
The prosecutors claim that the former CEO of FTX leaked private diary entries of his ex-girlfriend, Caroline Ellison, to The New York Times.
These alleged leaked entries included reflections on her relationship with Bankman-Fried and some professional concerns.
Shortly after The New York Times published the article, the prosecution formally requested the judge to modify Bankman-Fried’s bail conditions.
They argued that the defendant’s leaked documents were an attempt “to portray a key cooperator testifying against him in a poor and inculpatory light.”
They asserted that this was an effort to “intimidate and corruptly persuade Ellison with respect to her upcoming trial testimony, as well as an effort to influence or prevent the testimony of other potential trial witnesses by creating the spectre that their most intimate business is at risk of being reported in the press.”
Caroline Ellison was the former head of Alameda Research, a hedge fund co-founded by Bankman-Fried.
After pleading guilty to fraud charges, Ellison was expected to testify against Bankman-Fried in court.
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