The disgraced CEO of the defunct crypto exchange FTX, Sam Bankman-Fried (SBF), apparently could not resist violating the more-than-generous conditions of his bail and is now all set to pay the steep cost.
After his extradition from the Bahamas, Sam Bankman-Fried (SBF) faced multiple counts, including charges of violating anti-bribery statutes, conspiracy to make unlawful campaign contributions, as well as a number of counts related to wire and securities fraud. However, prosecutors have now dropped charges related to bribery and unlawful campaign contributions due to the lack of cooperation from the Bahamian authorities.
Despite the gravity of his crimes, Sam Bankman-Fried remained under house arrest on the back of a $250 million bond. Under the terms of his bail, SBF was relegated to a flip phone devoid of internet connectivity and restricted from contacting employees at FTX and Alameda Research – his personal hedge fund that had maintained a secretive symbiotic relationship with the now-defunct crypto exchange.
As a refresher, FTX and Alameda retained comingled funds at the Silvergate bank, allowing Sam Bankman-Fried’s hedge fund the opportunity to borrow FTX client funds after posting collateral in the form of illiquid tokens, including FTX's in-house FTT coin. This gig ended when Alameda's outsized exposure to the FTT token became public knowledge in early November, prompting Binance to dump its own FTT holdings, collapsing the token's price. Amid this fracas, the then-CEO of Alameda Research, Caroline Ellison, gave away the trading firm's floor price on the FTT token, inviting a veritable onslaught of speculative attacks. With Alameda's ability to pay off its liabilities impaired as its collateral of illiquid tokens quickly lost their inflated values, and with surging client withdrawals resulting in a bank run, FTX had no choice, in the end, to declare bankruptcy.
Judge Kaplan: This defendant tries to go right up to the line - his use of the VPN to watch a football game over an account he wasn't authorized, there it is..
— Inner City Press (@innercitypress) August 11, 2023
Last month, Sam Bankman-Fried leaked the diary of Ellison, who also happens to be his ex-girlfriend, prompting the DoJ to petition the court to place a ban on all out-of-court statements made by witnesses and other parties in the case. SBF had also used a VPN to watch a football game, thus violating his bail conditions.
In view of the evidence provided, Judge Kaplan concluded:
"In view of the evidence, my conclusion is that there is probable cause to believe that the defendant has attempted to tamper with witnesses at least twice under Section 1512(b)."
JUST IN: Sam Bankman-Fried is en route to a notorious Brooklyn prison known for its harsh conditions.
Fun facts about the facility:
Jeffrey Epstein died here.
Ghislaine Maxwell & former Honduran President criticized conditions.
In 2019, a cold snap power outage led to… pic.twitter.com/it4QHlUBEo
— WhaleWire (@WhaleWire) August 14, 2023
As such, Sam Bankman-Fried is now heading to a Brooklyn prison known for its harsh conditions. Interestingly, this is the same prison where Jeffrey Epstein committed suicide under mysterious circumstances. SBF will remain in prison until his trial commences in October 2023.
Do you think Sam Bankman-Fried is now about to face a just comeuppance for his litany of misdeeds? Let us know your thoughts in the comments section below.
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