FTX Founder Sam Bankman-Fried In Custody After His Bail Revoked Over Leaks

A US federal judge ordered FTX founder Sam Bankman-Fried back to prison on Friday, less than two months before his trial, after prosecutors claimed he broke the terms of his bail and tampered with witnesses.

Sam Bankman-Fried, 31, has pleaded not guilty to accusations of wire fraud and conspiracy to commit money laundering, and election financing crimes stemming from his cryptocurrency firm’s stunning collapse.

According to the ruling, US District Judge Lewis Kaplan ordered Bankman-Fried’s return to federal detention, claiming probable cause… that the defendant has committed the federal crime of attempted witness tampering.

Prosecutors contended that Bankman-Fried’s efforts as a source for The New York Times amounted to witness intimidation, citing an article including private writings of Caroline Ellison, a former Alameda Research employee.

Ellison, who was romantically involved with Bankman-Fried, is a federal cooperating witness.

Bankman-Fried’s trial is set to begin in early October.

In November, FTX and its sibling trading firm Alameda Research declared bankruptcy, thus ending a virtual trading operation valued by the market at $32 billion.

Prosecutors claim Bankman-Fried, who was released on $250 million bail and confined to his parents’ California home prior to Friday’s ruling, defrauded investors and misappropriated cash belonging to FTX and Alameda Research clients.

The former FTX chief had appeared on the covers of finance and technology magazines, with Fortune likening him to Warren Buffett, and had attracted significant investments from notable fund managers and venture capitalists.

But it all come crashing down when a media revelation revealed that Alameda’s balance sheet was mainly based on a token produced by FTX with no independent value, exposing Bankman-Fried’s enterprises as dangerously intertwined.

On December 12, Bankman-Fried was arrested at his Bahamas apartment at the behest of federal prosecutors in New York.

He spent nine days in prison as a permanent resident of the Bahamas, pondering his options before opting not to oppose extradition to the United States.

Also read: US And China Agree To Double Weekly Flights Between Two Nations