NEW: Bail Revoked; Thrown in Jail

( – HAPPENING NOW: Sam Bankman-Fried, the founder of FTX who has been indicted, was sent to jail on Friday after US District Judge Lewis Kaplan canceled his bail.

This decision was made due to accusations that Bankman-Fried had shared personal writings of his former girlfriend and business partner, Caroline Ellison, with a New York Times journalist.

Judge Kaplan found it plausible that Bankman-Fried might have tried to “tamper with witnesses at least twice” after his arrest for fraud in December.

Though the defense lawyer, Mark Cohen, intends to challenge the jailing decision, the judge didn’t grant a stay during the appeal. The defense accused the prosecutors of seeking imprisonment based on mere “innuendo, speculation, and scant facts.”

Previously under house arrest in Palo Alto, California, with a bond of $250 million, Bankman-Fried, aged 31, has now been transferred to the Manhattan Detention Complex.

The trial begins on Oct. 2. He has refuted claims that he misused billions from FTX customers to support an opulent lifestyle and back high-risk wagers at Alameda before its collapse.

Federal authorities had earlier mentioned that Bankman-Fried had overstepped by pestering Ellison, ex-CEO of his failed cryptocurrency hedge fund, Alameda Research. Ellison, who has admitted to fraud, is considered pivotal when Bankman-Fried stands trial for allegedly defrauding FTX customers of billions.

Cohen argued that the terms of his client’s bail allowed him to converse with journalists. He emphasized that Bankman-Fried had faced numerous adverse reports, and his interactions with the media aimed to defend his reputation before the trial. Earlier on July 26, Judge Kaplan had limited Bankman-Fried’s public remarks about the case and had asked if jail was necessary. This restriction attracted media scrutiny, including from the Times, who on Aug. 2 suggested the order be eased only to prevent comments that could jeopardize a fair trial.

On July 20, the newspaper included pieces from Ellison’s personal Google documents. In these writings, before the downfall of FTX, Ellison spoke about her strained relationship with Bankman-Fried and its effect on their professional setting.

A February 2022 entry revealed Ellison’s concern about the potential negative consequences of their tumultuous relationship on the company. Another entry in April 2022 highlighted her decreased enthusiasm for Alameda after a breakup with Bankman-Fried, stating she “felt too associated with [Bankman-Fried] in a way that was painful.”

Two other ex-FTX officials, Nishad Singh and Gary Wang, along with Ellison, have consented to cooperate in the case against Bankman-Fried, who is accused of misappropriating billions from FTX customers to sustain a luxurious life and backing unstable investments at Alameda.