FTX founder Sam Bankman-Fried jailed after bail revoked

Prosecutors argue he violated bail conditions and tampered with witnesses ahead of trial

Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, was ordered to be jailed on August 11 for violating bail conditions. Reuters
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A US federal judge on Friday ordered FTX founder Sam Bankman-Fried back to prison after prosecutors argued he had violated the conditions of his bail and tampered with witnesses, less than two months before his trial.

The 31-year-old Mr Bankman-Fried has pleaded not guilty to charges of wire fraud and conspiracy to commit money laundering, as well as breaching election finance rules, in connection with the spectacular collapse of his cryptocurrency firm.

US District Judge Lewis Kaplan directed Mr Bankman-Fried back into federal custody citing “probable cause … that the defendant has committed the federal crime of attempted witness tampering”, the ruling said.

Prosecutors argued that Mr Bankman-Fried's activities as a source for The New York Times amounted to witness intimidation, citing an article containing private writings of Caroline Ellison, who formerly worked at Alameda Research.

Ms Ellison, who was romantically involved with Mr Bankman-Fried, is a co-operating witness in the government's case.

Mr Bankman-Fried is due to go on trial in early October.

FTX and its sister trading house Alameda Research went bankrupt in November, dissolving a virtual trading business that at one point had been valued by the market at $32 billion.

Prosecutors allege Mr Bankman-Fried – who had been released on $250 million bail and confined to his parents' California home before Friday's ruling – cheated investors and misused funds that belonged to FTX and Alameda Research clients.

The former FTX chief had appeared on the covers of finance and tech magazines, with Fortune likening him to Warren Buffett, and drew in huge investments from prominent fund managers and venture capitalists.

But it all imploded when a media report said Alameda's balance sheet was heavily built on a token created by FTX with no independent value – and exposed Mr Bankman-Fried's companies as being dangerously interlinked.

Mr Bankman-Fried was arrested at his apartment in the Bahamas on December 12 at the request of federal prosecutors in New York.

A Bahamas permanent resident, he spent nine days in prison, weighing his choices before deciding not to fight extradition to the US.

Updated: August 11, 2023, 9:03 PM