As the trial of Sam Bankman-Fried (SBF), the founder of bankrupt cryptocurrency exchange FTX continues, a recent court verdict has declared that the failed entrepreneur be incarcerated before his scheduled October trial.
According to Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York, the decision to detain the 31-year-old entrepreneur stems from allegations of tampering with witnesses, prompting the judge to reassess the conditions of his release.
SBF Violates Bail Terms
Also, the DOJ noted that the embattled billionaire allegedly tampered with witnesses including leaking personal documents that belong to Caroline Ellison, the former CEO of Alameda Research. Bankman Fried released the contents of her diary which was linked with FTX to a reporter who planned to feature it in a New York Times article.
Soon after, SBF requested a modification of his bail, he tried contacting the present general counsel of FTX US through email and signal, an encrypted messaging application. Through this means of communication, SBF evaded supervision, thereby complicating the investigation, as the app’s auto-deletion feature effectively wiped previous chats between the defendants and several third parties in his lawsuit.
Similarly, federal prosecutors have claimed that SBF used a virtual private network (VPN) while watching the Super Bowl which is a violation of a previous order forbidding him from using encrypted technology.
Sam Bankman-Fried Attorney in his Defense
SBF’s lawyer Mark Cohen said his client’s use of VPN was an oversight and not an intentional transgression. He further described the measure as draconian adding that the former CEO needs access to the internet to prepare for his trial. The defense team also argued that jailing Bankman-Fried would make it very difficult to prepare for his trial.
Mark also argued that the prosecutors did not have a sufficient legal basis to jail SBF ahead of trial, noting that the standard set by precedent cases had not been met.
SBF Crossed the Line
However, Kaplan was not convinced by these arguments, as he does not believe the revocation is quite an insurmountable problem.
Meanwhile, during the hearing, Danielle Sassoon, Assistant U.S. Attorney argues that jailing Sam Bankman-Fried was further needed by the fact that he was constantly visiting New York for pre-trial conferences and trial preparation. Sassoon added that SBF is unsupervised while he’s here.