FTX Collapse

The former crypto king had his bail revoked by a judge on fraud charges connected to the demise of currency exchange FTX

Sam Bankman-Fried, the disgraced wunderkind whose cryptocurrency exchange platform FTX imploded last November, will go from house arrest at his parents’ home to jail, a judge has ordered ahead of his trial on fraud charges.

In a Friday hearing, Judge Lewis Kaplan of Federal District Court in Manhattan formally revoked Bankman-Fried’s bail, ending his residence with his family in Palo Alto, California, as he prepares a legal defense for a blockbuster case centered on the ruins of a company once valued at $32 million. The 31-year-old, admired as a brilliant crypto kingpin until his downfall, had been extradited from the Bahamas, where FTX was headquartered, in December. He originally posted a bond of $250 million to be released into his parents’ custody.

Kaplan’s bail decision came in response to prosecutors’ arguments that Bankman-Fried had tried to intimidate a witness, Caroline Ellison, formerly an FTX executive and his girlfriend. (Ellison has already pleaded guilty to multiple counts of fraud and is cooperating in the case against her ex.) Bankman-Fried gave the New York Times private documents written by Ellison about her personal life and FTX that became the basis for an article in the newspaper last month; the prosecution described this as an attempt at intimidation by way of creating an unflattering image of Ellison.

The leak, they suggested, indicated a strategy to “intimidate and corruptly persuade Ellison with respect to her upcoming trial testimony, as well as an effort to influence or prevent the testimony of other potential trial witnesses by creating the specter that their most intimate business is at risk of being reported in the press.”

Prosecutors also reiterated their frustration that Bankman-Fried — who has never stopped working his media connections — continued to speak to other journalists, including author Michael Lewis, presently at work on a book about the FTX fiasco.

Defense counsel said they intended to appeal the revocation of his bail. Rolling Stone has requested further comment from Bankman-Fried’s legal team. His trial is scheduled to begin on Oct. 2, and, if convicted on all the original eight federal counts brought against him, he could receive a sentence that amounts to life behind bars. He faces a second trial in March 2024 on even more charges.