FTX co-founder Sam Bankman-Fried taken into custody amid fraud allegations

Tech mogul, Sam Bankman-Fried, who co-founded the cryptocurrency exchange FTX, faced an immediate turn of events, significantly affecting his freedom and potentially his career, as he was escorted into custody ahead of his looming fraud trial scheduled for less than two months from now. The swift manifestation of justice occurred last Friday afternoon during a court hearing overseen by US District Judge Lewis Kaplan in Manhattan.

Emotions ran high within the courtroom setting as the 31-year-old multi-millionaire was handcuffed immediately following the judge’s startling decision, leaving his mother in an understandable state of distress among the courtroom spectators.

The dramatic development resulted from the prosecutorial team’s request to Judge Kaplan, urging him to revoke Bankman-Fried’s astronomical US$250 million bail package. The initiative sprung from accusations targeting the FTX co-founder for alleged unauthorised document leakage intended to blemish the credibility of Caroline Ellison, the erstwhile CEO of Alameda Research. Ellison, touted as a crucial government witness, has been a pivotal figure in the underlying case.

Securing a gag order, according to Kaplan, isn’t a longer-term feasible solution, especially dealing with an individual who, as observed by the court, exhibits keen intent to push limits and take calculated risks to toe the line, regardless of its precarious implications.

Despite the fierce defensive attempts by his legal team to quash the idea of placing their client into custody, their argument that the 31-year-old was merely exercising his first amendment rights while communicating with a New York Times journalist failed to sway the court.

For instance, Bankman-Fried’s attorney, Mark Cohen, argued that his client had no intent of tampering with witnesses. In response, the probing Judge Kaplan countered with a metaphorical scenario, likening the groundless justification to a situation where two individuals threaten a storekeeper about a potential store fire incident.

The crypto entrepreneur, now taken into custody, was previously serving house arrest since last December at his parent’s residence in Palo Alto, California. The sequence of events at the trial witnessed a firm stand by Judge Kaplan, who rejected a plea by Bankman-Fried’s lawyer to postpone the order.