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Judge Sends FTX Founder Sam Bankman-Fried To Jail, Says Crypto Mogul Tampered With Witnesses

FTX founder Sam Bankman-Fried left a federal courtroom in handcuffs Friday when a judge revoked his bail after concluding that the fallen cryptocurrency wiz had repeatedly tried to influence witnesses against him.

Bankman-Fried drooped his head as Judge Lewis A. Kaplan explained at length why he believed the California man had repeatedly pushed the boundaries of his $250 million bail package to a point that Kaplan could no longer ensure the protection of the community, including prosecutors’ witnesses, unless the 31-year-old was behind bars.

After the hearing ended, Bankman-Fried took off his suit jacket and tie and turned his watch and other personal belongings over to his lawyers. The clanging of handcuffs could be heard as his hands were cuffed in front of him. He was then led out of the courtroom by U.S. marshals.

It was a spectacular fall for a man who prosecutors say portrayed himself as “a savior of the cryptocurrency industry” as he testified before Congress and hired celebrities including Larry David, Tom Brady and Stephen Curry to promote his businesses.

Prosecutors said Bankman-Fried stole billions of dollars in FTX customer deposits to fund his businesses and speculative venture investments, make charitable donations and spend tens of millions of dollars on illegal campaign donations to Democrats and Republicans in an attempt to buy influence over cryptocurrency regulation in Washington.

Kaplan said there was probable cause to believe Bankman-Fried had tried to “tamper with witnesses at least twice” since his December arrest, most recently by showing a journalist the private writings of a former girlfriend and key witness against him and in January when he reached out to FTX’s general counsel with an encrypted communication.

The judge said he concluded there was a probability that Bankman-Fried had tried to influence both anticipated trial witnesses “and quite likely others whose names we don’t even know” to get them to “back off, to have them hedge their cooperation with the government.”

The incarceration order signed by the judge said Kaplan found probable cause to believe Bankman-Fried had committed the federal crime of attempted witness tampering.

Bankman-Fried’s lawyers insisted that their client’s motives were innocent and he shouldn’t be jailed for trying to protect his reputation against a barrage of unfavorable news stories.

Attorney Mark Cohen asked the judge to suspend his incarceration order for an immediate appeal, but Kaplan rejected the request. Within an hour, defense lawyers had filed a notice of appeal.

Bankman-Fried was sent for the night to the Metropolitan Detention Center in Brooklyn, which has previously housed convicted “pharma bro” pharmaceutical executive Martin Shkreli and convicted sex offenders R. Kelly and Ghislaine Maxwell.

Bankman-Fried had been under house arrest at his parents’ home in Palo Alto, California, since his December extradition from the Bahamas on charges that he defrauded investors in his businesses and illegally diverted millions of dollars’ worth of cryptocurrency from customers using his FTX exchange.

His bail package severely restricted his internet and phone usage.

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