Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, has been arrested and sent to prison after a federal judge revoked his bail, accusing him of trying to influence witnesses who were set to testify against him.
Bankman-Fried has been placed under house arrest at his parents' home located in Palo Alto, California, following his arrest in December last year. The case brought against him accuses him of fraud charges stemming from FTX's implosion.
Sam Bankman-Fried Jailed
During a hearing on Friday, however, Judge Lewis A. Kaplan of the Federal District Court in Manhattan said that the arrangement would have to end. The decision was made after prosecutors argued that the 31-year-old defendant tried to interfere twice with witnesses in the case, including when he gave reporters documents.
In a statement on the bench, Judge Kaplan said that Bankman-Fried had gone up to the line multiple times, prompting him to revoke the defendant's bail. After Kaplan's order was read aloud, two U.S. marshals ordered Bankman-Fried to remove his tie and navy suit jacket as they prepared to handcuff him, as per the New York Times.
The defendant's mother, Barbara Fried, was in attendance with her husband and tried to approach her son. However, a court officer cautioned her to stand back before the defendant was transferred to the Metropolitan Detention Center located in Brooklyn.
Mark Cohen, one of Bankman-Fried's lawyers in the case, said in court that he plans to appeal the federal judge's decision. On the other hand, Kaplan said that he would not wait any longer for the outcome of that effort before sending the defendant to jail.
The scene inside the courtroom is the latest development of Bankman-Fried's case since his cryptocurrency company's downfall. The incident is considered one of the recent most stunning corporate crashes.
Alleged Witness Tampering
Former FTX executive Caroline Ellison, who is also Bankman-Fried's former girlfriend, belonged to a group of former partners who have taken a plea deal and are planning to testify against him, according to CNN.
On Friday, Kaplan agreed with prosecutors when they argued that Bankman-Fried was trying to cover his tracks after he allegedly leaked Ellison's documents to the New York Times. This was allegedly done by allowing a reporter to review the document in person. The judge added that the leak would only be done "to hurt, discredit, and frighten the subject of the material."
On the other hand, the defendant's attorneys argued that Bankman-Fried had the right to defend his reputation in the press. They also emphasized that the defense of the suspect is very complex as it involves hundreds of thousands of documents and requires him to have regular access to a computer and the internet.
Bankman-Fried pleaded not guilty to stealing billions in FTX customer funds to cover up losses at his hedge fund Alameda Research. The defendant was initially able to avoid spending time in prison after he posted a $250 million bond, said Fox Business.
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