DOJ Wants SBF to be Kept in Jail Amid Witness Tampering Allegations
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DOJ Wants SBF to be Kept in Jail Amid Witness Tampering Allegations

A US judge has tightened Bankman-Fried's bail conditions and is also considering jailing him.
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The US Department of Justice (DoJ) has requested the detention of FTX founder Sam Bankman-Fried until his criminal trial, citing allegations of witness tampering. Following the request, a US judge tightened Bankman-Fried’s bail conditions and said he would consider jailing him before the trial.

DOJ Asks Court to Jail Bankman-Fried

On Wednesday, Bankman-Fried appeared in federal court with his attorneys following accusations that he had shared documents with the New York Times to discredit his former partner, Caroline Ellison, who served as CEO of Alameda Research. During the hearing, Danielle Sassoon, an assistant US attorney, asked for the crypto boss to be jailed. 

“It is the government’s view that no set of release conditions can secure the safety of the community,” she said. “… it appears to be undisputed the defendant provided the documents quoted [in the New York Times] … to discredit [Ellison].”

The DOJ claimed that Bankman-Fried provided documents to the New York Times to discredit Ellison. It was also revealed that Bankman-Fried had sent over 100 emails and had over 100 phone calls with a Times reporter who had written the article. 

Cohen, representing the defense, argued that Bankman-Fried did not attempt to discredit Ellison and had not personally reached out to reporters. Instead, he claimed that Bankman-Fried had a strategy to respond to reporters to influence the media narrative about him. 

“What we have here is a defendant who believes, given the many, many negative stories … given the literally thousands of stories about his relationship with Ms. Ellison … that he had the right to make fair comment,” Cohen said, adding that it may not be “the best strategy.”

He also argued that detaining Bankman-Fried would hinder his ability to organize his defense, citing the vast number of documents accessible through online tools. However, Sassoon countered that relying on digital tools for discovery was not a valid reason to avoid jail time.

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Judge Tightens Bankman-Fried’s Bail Conditions

Despite the DoJ’s request for immediate detention, Judge Lewis Kaplan from the Southern District of New York did not order Bankman-Fried to jail. However, he set out an expedited schedule for the prosecution and the defense to submit formal written statements. 

The DoJ has until Friday to submit their statement. Subsequently, the defense will have until Tuesday to submit their response, and the DoJ’s final response is expected by August 3. 

He also expressed concern over the contact between Bankman-Fried and journalists. The judge warned Bankman-Fried to take the matter seriously and issued an interim gag order, prohibiting him from communicating with the press or making public statements until Kaplan reviews the written submissions regarding whether or not his bail should be revoked entirely.

This is not the first time Judge Kaplan has expressed concerns about Bankman-Fried’s behavior while out on bond. In a previous hearing in February, the judge stated there was probable cause to believe that Bankman-Fried’s interactions with former FTX.US general counsel Ryne Miller formed witness tampering. 

Kaplan maintained this belief during Wednesday’s hearing, indicating enough reason to consider revoking bail. Bankman-Fried is scheduled to face trial in October for securities and wire fraud charges. A second trial, involving bank fraud and bribery allegations, is slated for March next year.

DOJ Drops Campaign Finance Charges Against SBF

In another update on the FTX saga, the DOJ has decided to drop a campaign finance charge levied against Bankman-Fried. The move came after The Bahamas did not include the eighth charge from the original indictment in its extradition treaty, according to a court filing late Wednesday. 

The charge was dropped because The Bahamas, where he was initially arrested, had to agree to the additional charges under the US’s extradition treaty with the nation.

The DOJ initially indicted Bankman-Fried on eight counts near the end of 2022. Prosecutors later added five charges, but Bankman-Fried’s defense team argued that they should not be included in the original indictment that served as the legal basis for his extradition to the US.

Last month, the DOJ ruled that the five charges levied against Bankman-Fried later can be brought to trial in March 2024, allowing the US Department of Justice to proceed only on eight charges brought in the initial indictment. 

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