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Update:
- FTX founder Samuel Bankman-Fried allegedly used misappropriated money to fund more than $100 million in political donations before the 2022 election, according to a new indictment in federal court.
- Bankman-Fried was indicted in the Southern District of New York on seven charges, including four wire fraud charges, securities and commodities fraud and conspiracy to commit money laundering.
- Bankman-Fried is accused of wiring money from an account with trading firm Alameda Research to the accounts of FTX executives, including Nishad Singh, and then having the executives make political donations.
- Bankman-Fried is also accused of lobbying politicians to create policies he thought would allow FTX to continue to grow.
Bankman-Fried lawsuit overview:
- Who: A Manhattan federal judge has revoked bail and ordered FTX founder Sam Bankman-Fried to be jailed prior to his October trial.
- Why: The judge determined that Bankman-Fried engaged in witness tampering and illegally communicated with the press.
- Where: The Bankman-Fried lawsuit is being heard in New York federal court.
(Aug. 16, 2023)
Sam Bankman-Fried, the founder of the now-bankrupt cryptocurrency exchange FTX, faces jail time prior to his upcoming trial after a Manhattan federal judge revoked bail over his alleged witness tampering, Law360 reports.
Bankman-Fried has been charged with fraud and conspiracy for allegedly pilfering FTX funds for his Alameda Research hedge fund. The Bankman-Fried lawsuit is slated to go to trial Oct. 2.
On Aug. 11, U.S. District Judge Lewis A. Kaplan ordered Bankman-Fried to be taken into custody after finding there was a “practical probability” that he attempted to influence or intimidate at least one witness.
In July, the Manhattan U.S. attorney’s office informed Judge Kaplan that Bankman-Fried improperly communicated with a New York Times reporter for an article about Caroline Ellison, an important witness in the upcoming trial.
Ellison reportedly ran Bankman-Fried’s Alameda Research hedge fund.
Prosecutors believed the New York Times Article, titled “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case,” could taint a jury pool. They also said that Bankman-Fried’s contribution to the article could be considered harassment towards Ellison.
“A defendant’s speech is not protected to the extent it is intended to bring about a crime,” said Judge Kaplan.
Bankman-Fried acknowledged that he provided documents to a New York Times reporter, but his defense attorneys argue that his motive was to protect his reputation, not intimidate a witness.
FTX founder previously communicated with Bankman-Fried lawsuit witnesses, judge says
Judge Kaplan previously warned Bankman-Fried about communicating with witnesses. In January, Bankman-Fried reportedly sent a message to former FTX general counsel Ryne Miller.
The judge also expressed concern about Bankman-Fried’s use of encrypted internet technology while awaiting trial at his parents’ Palo Alto home.
“My conclusion is that there is probable cause to believe that the defendant has attempted to tamper with witnesses at least twice,” Judge Kaplan said.
Any potential Bankman-Fried jail time will involve more than two months behind bars before his trial unless his legal team launches a successful appeal of Judge Kaplan’s order.
The FTX founder faces another Bankman-Fried lawsuit alleging FTX executives misappropriated funds and unlawfully transferred hundreds of millions of dollars.
What do you think of the judge’s Bankman-Fried jail time order? Tell us about it in the comments.
The Bankman-Fried lawsuit is USA v. Bankman-Fried, Case No. 1:22-cr-00673, in the U.S. District Court for the Southern District of New York.
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