Sam Bankman-Fried Jailed Ahead of Trial

FTX founder Sam Beman Fried was sent to jail on Friday. This is now ahead of his October trial after a federal judge revoked his bond. We're gonna talk to Nick Day about this Coindesk global policy and regulation managing editor who's also the editor of Coindesk state of crypto newsletter. Good morning, Nick. Hey, good morning. Happy Monday. Happy Monday. Happy Monday. Now, I'm sure it was a very busy weekend for you after we learned that Sam Bagman Fried is going back to jail on Friday. Talk to us about what was going on in that courtroom. Paint a picture. What happened on Friday. Yeah. So Friday, uh you know, with his parents in the audience, Sam Bacon Fried learned that, you know, after a hour and a half or so hearing he would be remanded to jail until the trial and uh you know, whatever preparation he's gonna have to do whatever plans he might have had. He will now have to do so behind bars. The judge, uh you know, basically was not having it with his defense team's arguments after he uh allegedly leaked Carolyn Ellison, the former Alameda Research CEO and his ex-girlfriend's uh private diary to the New York Times saying that there were no set of conditions that might keep him from being a danger to the public. And, uh, therefore he's getting remanded immediately. He must have known it. Like, what, what did his face look like? I mean, what did you get to see what he, his reactions on any of this? Or you just saw the back of his head? Well, I was sitting behind him after the judge read out his verdict. He, you know, looked down for a while, uh, you know, you could tell that his family, his parents in particular seemed pretty upset. Um, as I would imagine any parent would be, uh, for the first several, you know, long seconds after the judge read the verdict. Sam be Madrid was just looking down. Eventually, he looked up as his attorneys, uh, said today, a plan to file an appeal and b motion to state the detention order until that appeal was heard that stay was denied immediately after a very brief 32nd back and forth between the defense attorneys and the prosecution. Um, after that, you know, it was, uh, pretty straightforward. The marshals in the audience right behind him, asked him to take off his jacket. Uh, you know, I think I'm button his cuff links, um, and then they handcuffed him and escorted him out. Yeah, and, and I'm sure that must have felt humiliating, uh, take, taking out, uh, you know, definitely when you, when you have to take off your, your belt buckle and that, that's probably the worst part of the, uh, getting arrested. But that's a different story. Um, you know, it did, do you get the sense though that his, uh, defense attorneys, I mean, did you notice any interactions with them? I mean, obviously this has been some time now a few days but, I mean, clearly this was, you know, leaking those diaries probably wasn't something they had on their list of two dude things for, for, uh, Sam, was it? Yeah. And you know, well, I haven't spoken to, obviously, I haven't spoken to Sam's own attorneys about this. I have spoken to other former prosecutors and lawyers who say that, you know, part of the challenge for a defense attorney is controlling their client and, uh, this is one of those cases where it does not appear that that happened. And so, you know, I think you could tell right from the outset of the hearing that the vibe was kind of, everyone was expecting him to go to jail. No one was expecting anything else. You had extra marshals in the courtroom then, you know, more than you usually did. Uh, you know, you had several wit handcuffs and, you know, all the gear walking in right at the beginning, sitting down in the front, immediately behind, um, Ben and his defense team. Um, yeah, this is one of those things where everything, every moment felt like an inevitability. There was no situation where he was going to walk free. It seems. And that's what we saw play out. What's the likelihood of an appeal here? It's August. Now, the trial is supposed to start in October. What's the likelihood he gets out of jail before that October trial? I think that's gonna be up to the appeal court. The appeal hasn't filed, it was filed on Friday itself. So, you know, the, you know, the circuit, I believe it, the second circuit Court of appeals has that, but it'll be up to them to decide a, whether they want to take it b if they want to hold a hearing on that and see what that timing looks like. But as you said, you know, it's only two months, it's a very brief amount of time and this is a, you know, engine hearing for a judge who at least in his words doesn't get overturned on appeal that often. So, um, you know, I, I think there's a possibility we'll see, you know, more documents in consideration of this, but it seems unlikely he's going to get out in, you know, the immediate future. He's over in Boreham Hill. I mean, it's, it's pretty, you know, the rent there is pretty high. So, you know, at least he, he's, he's got cheap rent. Yeah, him, I, I gotta ask you, did the judge sound annoyed at all that, this was happening that there's so much back and forth over what Sam Bank Fried is doing on social media and that, you know, there it, it had to continuously be amendments to the bail conditions. I don't know if annoys the right word for it. He was very deliberate about how he spoke. Um, you know, the actual order in which he revoked Bein Fried Bale, he gave it verbally. It was, I think at least 20 minutes and it was just him going through, you know, every piece of evidence and argument that he was considering. So he walked through, for example, uh the prosecution's assertion that he reached out to the former FTX US general counsel, Ryan Miller or possibly current general counsel. I'm not sure. Uh, he reached out to Ryan Miller. He walked through both the prosecution's arguments as well as the defense's arguments about that. And in his view, you know, debunked the defense arguments over that particular, you know, contact. He walked through the leaking of the diary. He even walked through the, uh VPN usage that Sam Reed did and saying that, you know, while in and of itself, that's not necessarily innocuous. It does speak to be Mri's mindset of how he's approaching this trial. And, uh, you know, saying that he's willing to, uh walk, you know, across the line to try and find out where that line is and he's willing to do that repeatedly. Uh Basically saying, you know, in many words that he does believe that Bakeman Fried is not just kind of, you know, merely accidentally stepping across, uh, you know, doing things that, uh, aren't, you know, he's not supposed to but that he's deliberately probing to see how far he can go, how much he can get away with. Um, and yeah, he was very deliberate about that. It wasn't, his tone was measured, it wasn't annoyed, it wasn't, you know, ex exasperated. It was just here to facts and here's my decision. So what he's basically saying is, gee, I'm shocked that the guy who ran FTX, uh, you know, can't thinks he's, he knows everything about everything still. Yeah, I think you can definitely make that interpretation from, you know, what happened on Friday and if you read the transcript, which I imagine will be out soon and, you know, we'll have more about that this week. But, uh, yeah, he's definitely ii I think he lost his patience for sure. Um, you know, again, remember the last hearing that we had, we had, uh, we saw the Judge Warn be at the very end that he has to take this, all these proceedings seriously. Um And, you know, it's clearly something that he still believes in. He's not sure. Rain fried will hubris. That's the, that's the term. Yeah. Ubers. All right, Nick, we're gonna leave it there. Thanks for joining the show this morning and great reporting. Thank you. That was Coindesk global policy and regulation. Managing editor Nick Day. Don't forget to sign up for the state of crypto newsletter on coindesk dot com.