Judge to decide if ex-FTX CEO Sam Bankman-Fried goes to jail

A New York judge will decide on Friday, during a hearing that starts at 2 p.m. ET, whether to send Sam Bankman-Fried to jail.

Federal prosecutors have asked U.S. District Judge Lewis A. Kaplan to revoke the FTX founder’s bail over alleged witness tampering. If Judge Kaplan sides with the government, Bankman-Fried will be remanded to custody directly from a court hearing in Manhattan, where he would remain ahead of his criminal trial, due to begin on Oct. 2. 

Since his arrest in December, Bankman-Fried had been out on a $250 million bail package which requires him to remain at his parents’ Palo Alto, California house.

Bankman-Fried’s court appearance on Friday is the latest in a series of pre-trial hearings related to the ex-billionaire’s continued dealings with the press – exchanges which the Justice Department characterizes as a “pattern of witness tampering and evading his bail conditions.” 

Judge Kaplan previously issued a direct and stern warning to Bankman-Fried in July over his conversations with the media.

Members of the press, including counsel for The New York Times and the Reporters Committee for Freedom of the Press, have filed letters objecting to Bankman-Fried’s detention, citing free speech concerns. Defense attorneys have similarly argued that Bankman-Fried was asserting his first amendment right and did not violate any terms of his bail conditions by speaking with journalists.

The discovery process is also helping Bankman-Fried’s case.

Lawyers representing the former FTX chief have argued that if Bankman-Fried is jailed, he would not be able to properly prepare for his trial due to the mountainous amounts of discovery documents only accessible via a computer with internet access.

In the motion requesting Bankman-Fried’s detention, the government said that, over the last several months, the defendant had sent over 100 emails to the media and had made over 1,000 phone calls to members of the press. The final straw, according to prosecutors, was Bankman-Fried’s decision to leak private diary entries of his ex-girlfriend, Caroline Ellison, to the New York Times. 

Ellison, who is also the former chief executive of Bankman-Fried’s failed crypto hedge fund, Alameda Research, has been cooperating with the government since December and is expected to be a star witness for the prosecution. Ellison pleaded guilty to federal charges in Dec. 2022.

“Faced with a series of conditions meant to limit the defendant’s use of the internet and the phone, the defendant pivoted to in-person machinations,” the prosecution said of Bankman-Fried, whose revised bail conditions include restricted internet access and a ban from smartphone use. 

The government added that Bankman-Fried had more than 100 phone calls with one of the authors of the Times story prior to publication, many of which lasted for approximately 20 minutes. 

The prosecution described the effort by Bankman-Fried – who faces several wire and securities fraud charges related to the multibillion-dollar FTX fraud – as an attempt to discredit Ellison, characterizing it as a “means of indirect witness intimidation through the press.” 

Prosecutors have had to cull charges twice to comply with an extradition agreement inked with The Bahamas – where Bankman-Fried was previously held in custody. The government told the Judge in a letter that next week it plans to file a new superseding indictment.