Sam Bankman-Fried Jailed Ahead of Trial
Sam Bankman-Fried had his bail revoked and was remanded before his trial officially started
By: Zack Guzman
August 11, 2023
FTX founder Sam Bankman-Fried was ordered to jail by the judge in his case in a court hearing on Friday.
The government was successful in arguing for its request to detain Bankman-Fried, citing claims he was tampering with witnesses by speaking with the press ahead of trial.
Judge Kaplan ruled Friday that Bankman-Fried's decision to contact two key witnesses on two separate occasions led to, "an attempt at witness tampering." He put aside issues concerning a First Amendment right to speak to the press and ruled with a focus on the intent behind Bankman-Fried's actions constituted an intent to, "influence these people."
Kaplan found there was sufficient evidence to suspect SBF of working to dissuade potential witnesses by sharing personal and intimate documents with the media, such as personal diary entries written by Caroline Ellison. As Coinage covered over the last few weeks, prosecutors originally took issue with Bankman-Fried's decision to leak diary entries from Alameda Research CEO Caroline Ellison to the New York Times.
A visibly impacted Barbara Fried, Sam Bankman-Fried's mother, had to be asked to step back from moving towards her son after the judge read his ruling to revoke bail.
Coinage also spoke with SBF a week before Judge Kaplan imposed a gag order and has been reporting on SBF's side of what happened in FTX's collapse. Our first story dug into SBF's proposed defense to take a closer look at the role he says Ellison played in Alameda's and FTX's collapse.
SBF’s story of FTX’s collapse goes like this: A series of crashes in crypto prices cratered the value of Alameda’s assets. Caroline Ellison, having little risk management experience and feeling overwhelmed at her job, initially failed to hedge against the possibility of a crash, despite SBF’s suggestions that she do so.
By June 2022, according to SBF, Alameda had lost a fortune due to the downturn of the crypto market, its NAV crashing to about $14 billion. At that point, he threatened to fire Caroline, now the sole CEO of Alameda following Trabucco’s exit in early 2021, unless she hedged Alameda’s bets, and she complied.
However, in November 2022, customers rushed to withdraw billions of dollars worth of funds from FTX following fears of insolvency. This, in turn, caused the price of FTT to drop precipitously, making Alameda’s market hedges ineffective. In just a year, SBF calculated that Alameda’s NAV went from $75 billion to just $1 billion.
On Friday, SBF's defense tried to argue that he was only replying to requests for comment from the press — and even attracted support from Harvard Professor Emeritus Laurence Tribe and others in letters to the court filed last week.
SBF's trial is expected to begin in October.
Coinage is now likely the last outlet to interview SBF ahead of his trial. You can read our exclusive preview and research into his defense, and takes on it from outside legal experts here.
READ INSIDE SBF'S DEFENSE, Part I, featuring the prosecutor who took down Bernie Madoff.
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Disclosure: Alameda Ventures is one investor among many in Trustless Media, the production company behind Coinage.
