FTX founder Sam Bankman-Fried was heading to jail on Friday after a federal judge revoked his bail for attempting to tamper with witnesses in his upcoming fraud trial.
US District Judge Lewis Kaplan ordered Mr Bankman-Fried be detained after finding probable cause that he had harassed his former girlfriend and FTX executive Carline Ellison when he shared her private journals with the New York Times.
The 31-year-old former cryptocurrency billionaire’s lawyers immediately filed an appeal against the incarceration order, according to the Associated Press.
If the appeals fail, he will remain locked up until his trial begins in Manhattan on 2 October.
Mr Bankman-Fried had been under house arrest on $250m bail at his parents home in Palo Alto since he was extradited from the Bahamas last December on charges of defrauding investors of billions of dollars in his failed FTX cryptocurrency exchange.
Despite court orders restricting his internet and phone use, Mr Bankman-Fried was continuing to speak to journalists and contacted a general counsel for FTX with an encrypted communication, prosecutors claimed.
Mr Bankman-Fried could be sent to Metropolitan Detention Center in Brooklyn while he awaits trial.
Federal prosecutors have charged the FTX founder with stealing billions of dollars from the crypto exchange to pay debts for his hedge fund Alameda Research, purchase lavish real estate in the Bahamas, and donate millions to political campaigns.
They say he illegally diverted millions of dollars from customer’s cryptocurrency accounts using his FTX exchange. Mr Bankman-Fried has pleaded not guilty to all charges.
The hearing in Manhattan on Friday was the latest in a series of pre-trial hearings related to Mr Bankman-Fried’s interactions with the press, in what prosecutors described as a “pattern of witness tampering and evading his bail conditions.”
Prosecutors accused Mr Bankman-Fried of sending hundreds of emails and making more than 1,000 calls to journalists over the past few months.
Bankman-Fried is accused of flouting the terms of his bail
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They said that leaking Ms Ellison’s diaries to the New York Times was an attempt to discredit Ms Ellison, and a “means of indirect witness intimidation through the press.”
Lawyers for the New York Times and the Reporters Committee for Freedom of the Press had filed letters objecting to the detention order.
His defence attorneys claimed the prosecutor’s arguments were based on “innuendo, speculation, and scant facts.”
The Justice Department argued that Mr Bankman-Fried should be held in a jail in New York’s Putnam County Correctional Facility where he will have limited access to the internet to prepare his trial defence.
Ms Ellison, the former CEO of Alameda Research, pleaded guilty to federal charges in December and is cooperating with prosecutors.
