Sam Bankman-Fried, the founder of the once-celebrated cryptocurrency exchange FTX, faced a significant setback as U.S. District Judge Lewis Kaplan denied him pretrial release. This ruling came ahead of his trial, which was set for October 3 and involved multiple fraud charges.
Bankman-Fried was indicted in December and had been given 7.5 months to review materials electronically. He faced allegations of diverting billions of dollars from FTX customer accounts to offset losses at his hedge fund, Alameda Research, as well as for other financial activities, including real estate purchases and political contributions.
Judge Kaplan dismissed the defense’s arguments that conditions at Brooklyn’s Metropolitan Detention Center had hindered Bankman-Fried’s ability to prepare an adequate defense. Kaplan wrote that the defendant was represented by a “substantial team of extremely able retained lawyers” who intended to call at least seven expert witnesses to the stand. He emphasized that Bankman-Fried had neither requested a trial delay nor specified which discovery materials he had been unable to access, suggesting that any difficulties were self-inflicted.
Bankman-Fried’s bail had been revoked the previous month after Kaplan found probable cause for witness tampering. Among the key witnesses was Caroline Ellison, Bankman-Fried’s former romantic partner and colleague, who had led Alameda Research. Ellison had pleaded guilty to fraud and was expected to testify against him. The process of selecting jurors for the trial is currently underway.
The defense and the Department of Justice had been in a tug-of-war over Bankman-Fried’s access to discovery materials. The defense argued that his limited access was seriously hampering his ability to work on his defense, while the Department of Justice contended that he had sufficient access to laptops and hard drives.
Adding another layer to this intricate case, the Department of Justice recently dropped Campaign Finance charges against Bankman-Fried. This move came at the request of the Bahamas on August 14, though the reasons remain undisclosed.
Currently, a panel of three judges from the Second Circuit Court of Appeals is set to consider an appeal challenging Bankman-Fried’s detention on September 19. As the October 3 trial date approaches, Bankman-Fried would continue his defense preparations from his confinement.
