Examining the intersection of cryptocurrency and government

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Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De.

Originally, this newsletter was an analysis on whether or not Sam Bankman-Fried would be released from jail ahead of trial. A short while ago, Judge Lewis Kaplan, of the U.S. District Court for the Southern District of New York, ruled he wouldn’t be. So this is now just that article, with some added stuff, basically.

(Nikhilesh De/CoinDesk)

Sam Bankman-Fried lost a bid to be released from jail ahead of his trial next month. All hope isn’t lost for him, but time is running out for the FTX founder.

On Tuesday, Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York ruled that Bankman-Fried did not make a particularly persuasive argument that he should be released from jail – where, as a reminder, the judge put him last month on public safety grounds.

After weeks of back-and-forth on whether or not Bankman-Fried would be released from jail ahead of trial, we have an answer: He won’t be. The judge wrote a brief, fairly dismissive memo citing multiple reasons for his decision, ranging from finding arguments about the amount of time left before trial unpersuasive to saying the defense team didn’t really make a case. The judge left the door open for a new motion that might be more persuasive, but at this point timing may become an issue. A whole month passed between Bankman-Fried's team first trying to get him out of jail and Tuesday's ruling. The trial begins in just three weeks.

My speculative guess is that, at some level, Bankman-Fried’s team didn’t truly expect him to be released. The arguments about the Sixth Amendment seemed more of a rhetorical device. What I think is going to happen is if Bankman-Fried is convicted on one or more of the seven charges he faces at present, his defense team will file an appeal.

In that appeal, I expect they’re going to point to these pretrial motions and argue that he didn’t really have a fair shot at building his defense because of his pretrial incarceration.

This is all speculation though.

What we do know is there are three weeks left until the trial begins. The first step is the final pretrial conference. Judge Kaplan will likely schedule a final conference in the next few weeks where he will lay out how the trial will go, addressing any motions to strike, disclosed witness testimony issues, what rules the prosecutors and defense have to abide by during the trial itself and so on.

Around then, we should start getting a full list of witnesses. There's been some speculation that Ryan Salame, the former co-CEO of FTX Digital Markets, may now testify after pleading guilty to charges last week. Still, the New York Times reports that he is not cooperating in the Bankman-Fried investigation.

That being said, we already know from the DOJ’s past memos that they have written materials from Salame’s phone, which will make an appearance in the trial.

On October 3 itself, we’re going to start with jury selection, otherwise known as voir dire, which is likely to take several days.

CoinDesk will cover each and every day of the trial itself when it begins, with reporting direct from the courtroom. You can read all of our ongoing coverage here, and sign up to a new daily newsletter authored by Danny Nelson, Elizabeth Napolitano, Sam Kessler, Helene Braun and myself. The newsletter kicks off next week, and will run through the entirety of the trial.

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If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See y’all next week!

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