FTX founder Sam Bankman-Fried jailed after US judge revokes bail

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Sam Bankman-Fried has been taken into custody after a federal judge found that the FTX founder probably attempted to tamper with witnesses on two occasions while awaiting trial on fraud charges stemming from the collapse of the cryptocurrency exchange.

In a brief written order following a hearing in Manhattan federal court on Friday, Judge Lewis Kaplan said “there is no condition or combination of conditions of release that will assure that the defendant will not pose a danger to other persons or the safety of the community”.

Prosecutors had asked Kaplan to revoke Bankman-Fried’s bail after The New York Times published extracts from the private diaries of Caroline Ellison, the former head of the cryptocurrency exchange’s affiliated hedge fund Alameda Research. She has pleaded guilty to criminal charges and is co-operating with prosecutors.

Bankman-Fried was subsequently identified by prosecutors as the source of the material, which covered a period in which he was romantically involved with Ellison. The diary materials were “something that someone who is in a relationship would be unlikely to share with anybody, still less The New York Times, except . . . to frighten” the author, Kaplan said.

The incident followed a series of complaints from prosecutors about Bankman-Fried’s conduct while awaiting a trial that is set for October. The FTX founder is accused of misappropriating billions of dollars that customers deposited at his cryptocurrency exchange.

In a separate incident that drew fire from prosecutors, Bankman-Fried contacted a former colleague who is a potential witness in the case to “see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other”, according to messages quoted in court filings.

Kaplan said during Friday’s hearing that the message was probably an effort to make sure that the two men could “sing out of the same hymn book for their mutual benefit”.

Bankman-Fried was arrested in the Bahamas in December and agreed to be extradited to the US to face a number of criminal charges following the dramatic collapse of FTX. He has pleaded not guilty.

Bankman-Fried was freed on a $250mn bond, secured in part by his parents’ California home. His bail conditions also required him to wear an ankle bracelet and stay at his parents’ house.

But prosecutors accused him of evading some of those conditions, including by using a virtual private network that obstructed monitoring of some of his internet activity. Bankman-Fried said he had been trying to watch football.

His parents attended the bail hearing on Friday. His mother, Stanford law professor Barbara Fried, held her head in her hands as Kaplan described how her son showed Ellison’s diaries to a reporter at their home in Palo Alto instead of using a messaging app that would create an electronic trail.

A lawyer for Bankman-Fried said he would appeal against the decision to revoke his client’s bail. But Kaplan ordered him detained immediately, stating that the attempt to overturn his ruling was likely to fail.

Bankman-Fried hurriedly removed his tie as US marshals advanced bearing handcuffs. His mother tried to approach him, but was led away.

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