Topline
A federal appeals panel on Thursday denied a request from indicted former FTX head Sam Bankman-Fried for release from a New York detention center while he awaits trial on criminal fraud charges stemming from an alleged scheme to divert millions of dollars of customers’ money, marking the latest legal blow to the former crypto billionaire as he awaits trial.
FTX founder Sam Bankman-Fried was denied release ahead of his highly anticipated trial next month.
Key Facts
Bankman-Fried, who has pleaded not guilty to all charges and had his $250 million bail revoked last month, will remain in jail ahead of his October 3 fraud trial.
In its ruling, the three-judge panel wrote that there is “probable cause to believe” Bankman-Fried “attempted to tamper” with witnesses in an attempt to influence them before the trial.
The denial is the latest for Bankman-Fried, who has had a litany of requests shot down: he’s been denied the use of a cell phone or internet access, and has been denied a vegan diet while he awaits trial at a Brooklyn detention center.
Surprising Fact
A federal judge this week also ruled in favor of a Department of Justice motion in the case to block Bankman-Fried’s seven proposed witnesses from testifying at trial, arguing their disclosure statements are “inadmissible” for multiple reasons, including by not being clear and unlawfully offering legal opinions to the jury. It comes as new allegations emerge against him, including that his parents received millions of dollars in gifts from funds that had been “fraudulently transferred and misappropriated.”
Tangent
Earlier this month, an associate of Bankman-Fried, former FTX Digital Markets CEO Ryan Salame, pleaded guilty to criminal charges, including conspiracy to run an unlicensed money transmitting business and conspiracy to make unlawful political contributions, stemming from Bankman-Fried’s fraud case. Salame is the latest former FTX executive to enter a plea in recent months, following company co-founders Nishad Singh, Gary Wang and former Alameda Research CEO Caroline Ellison, who have all entered guilty pleas on criminal fraud charges.
Key Background
Bankman-Fried’s FTX empire, which launched him to international stardom in the burgeoning crypto market, came crashing down late last year after rival Binance pulled out of a plan to buy FTX and sell off its FTT tokens, leading FTX to file for bankruptcy, following allegations he conducted a scheme to divert billions of FTX customers’ dollars to pay off expenses at Alameda, a sister trading firm. He was charged in December with eight criminal counts, including conspiracy to launder money and wire fraud, following his extradition from the Bahamas.
Further Reading
Another FTX Executive—Ryan Salame—Pleads Guilty To Criminal Charges Over Company’s Collapse (Forbes)
FTX Sues Sam Bankman-Fried’s Parents For Millions In Allegedly Illicit Gifts (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2023/09/21/sam-bankman-fried-ordered-to-stay-in-jail-ahead-of-trial-by-appeals-court/