The wheels of justice: Shamed crytopreneur Sam Bankman-Fried is finally seeing the inside of a prison cell. While the founder of the collapsed FTX cryptocurrency exchange has not been found guilty of any charges brought against him, he has been playing fast and loose with the judicial system's rules and expectations. A judge finally decided enough was enough and revoked his bail.
Since shortly after SBF's arrest last December, the former FTX CEO has been under house arrest in his parents' home in Palo Alto, California. The condition was part of his bail agreement and allowed him the freedom to use his computer and other electronic devices responsibly. However, SBF began bending the rules of his court-mandated house arrest from nearly the outset by misusing his electronic devices.
In March, authorities caught him using a VPN. They suspected he was trying to hide communications with former associates and witnesses and get them to lean their stories in his favor. His lawyers claimed he only viewed "football games" through the VPN. Lewis Kaplan, the federal judge presiding over the case, didn't buy the defense's excuse and banned SBF from using a VPN.
Around the same time, prosecutors alleged he was also using the encrypted messaging app Signal. They suggested he used it for the same reasons they suspected he was using a VPN – contacting and tampering with witnesses. Judge Kaplan considered revoking his bail privileges but ultimately agreed to allow limited use of "monitored" offline electronic devices.
Sam Bankman-Fried will prepare for his fraud trial from a Brooklyn jail where inmates ranging from convicted sex trafficker Ghislaine Maxwell to Honduras' former president have complained of subpar conditions https://t.co/eukOgJSriP pic.twitter.com/34jMX1dwAd– Reuters (@Reuters) August 14, 2023
It all came to a head last month when US prosecutors petitioned the court to issue a gag order after the New York Times published a story containing private journal entries of SBF's ex-girlfriend and former Alameda Research CEO Caroline Ellison. Prosecutors once again claimed Bankman-Fried was trying to discredit her testimony and tamper with the jury pool.
Ellison pleaded guilty to her participation in defrauding FTX investors in exchange for a lighter sentence and becoming the state's witness. Prosecutors believe he intentionally leaked Ellison's journal to intimidate and discredit her. So they asked the court for an injunction, citing fears that Bankman-Fried would continue attempting to corrupt witnesses and jurors.
In a move that seemingly said, "I'll do you one better," Judge Kaplan revoked SBF's bail agreement and remanded him to jail. Kaplan cited in his decision that Mr. Bankman-Fried had tried to "tamper with witnesses at least twice" and, therefore, could not be trusted to adhere to his bail agreement while under house arrest.
Reuters notes that after Kaplan read his decision, US Marshals removed SBF's shoelaces, jacket, and tie, emptied his pockets, then removed him from the courtroom. They then immediately escorted him to a jail cell in Brooklyn where he will remain until trial.