Disgraced FTX co-founder Sam Bankman-Fried has been slapped with a gag order preventing him from speaking publicly about his blockbuster trial in October, as prosecutors lobbied a federal judge to jail him until the case is heard.
The 31-year-old former crypto billionaire was back in a Manhattan courthouse Wednesday after allegedly trying to tamper with the testimony of the prosecution’s star witness, his ex-girlfriend and former business partner Caroline Ellison.
Prosecutors alleged that he leaked intimate messages from Ellison to the New York Times to discredit her, because she is expected to testify against him during his trial.
The messages, which were leaked from a Google drive from February 2022, saw Ellison journal about her struggles as CEO of Alameda Research, the hedge fund arm of FTX. She described being racked with self-doubt over her decision making, with one message reading: ‘At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all.’
After hearing arguments at the bail hearing, US District Court Judge Lewis Kaplan handed down a gag order, and is set to weigh whether to keep Bankman-Fried in jail for the next three months. Bankman-Fried walked out of court and his defense is set to make its case by August 1 to decide whether or not he will be jailed pre-trial.
Sam Bankman-Fried pictured leaving Manhattan Federal Court after being handed a gag order on Wednesday, July 26
The former crypto billionaire is accused of trying to discredit his ex-girlfriend and business partner Caroline Ellison before her expected testimony in October
Bankman-Fried is accused of trying to intimidate his ex-girlfriend Caroline Ellison (pictured), who is expected to testify at his trial in October
Since he was controversially released on a $250 million bail in December, Bankman-Fried has been hauled before Manhattan court several times for angering prosecutors, including violating his ban on using the internet to stream the Superbowl in February.
The New York Times article at the heart of Wednesday’s hearing saw was titled ‘Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case.’
The article included intimate information about her time as CEO of Alameda Research, where she detailed being ‘unhappy and overwhelmed’ by the role.
‘At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all,’ she wrote in leaked messages, which were written in a Google document in February 2022.
In another section of the leaked Google file, she wrote that ‘it doesn’t really feel like there’s an end in sight.’
Ellison was running the hedge fund despite being in her mid 20s, and she sad in the document that she didn’t see herself as well suited for running the major company and struggled with making decisions.
Prosecutors asked Kaplan to revoke Bankman-Fried’s bail as they claim he was the source of the information, alleging he did so to ‘interfere with a fair trial by an impartial jury.’
In previous court sessions, Kaplan indicated that he was open to revoking Bankman-Fried’s bail and having him await trial from behind bars.
Bankman-Fried could be jailed for over 100 years for crimes related to the collapse of cryptocurrency exchange FTX in November
The 31-year-old has been hauled before Manhattan court several times for angering prosecutors
Prosecutors alleged that Bankman-Fried had been a source for multiple stories surfacing in the media, which branded an ‘ongoing campaign with the press that has now crossed a line’
US Attorney Danielle Sassoon also alleged on Wednesday that Bankman-Fried had been a source for multiple stories surfacing in the media, which branded an ‘ongoing campaign with the press that has now crossed a line.’
However, the former crypto boss’ legal team fired back over claims he was trying to tamper with a witness, with attorney Mark Cohen slamming the prosecution for ‘pretending it never speaks to the media about this case.’
Reports indicate that audible gasps rung out across the courtroom when the government requested he be jailed, and Cohen claimed he wasn’t given prior notice over the move.
‘We learned for the first time one minute before court that the government is seeking detention,’ he said, slamming the request as ‘not a proper process.’
The defense also argued that their client’s frequent public statements about his case are his constitutional right.
His attorneys cited a ‘toxic’ approach from the press that has been ‘almost uniformly’ negative, which they feel means he has the ‘right to counter that public narrative by making fair comment in the media.’
The 31-year-old has made numerous public remarks and blog posts in recent months about his time waiting federal charges, and Sassoon said prosecutors feel they ‘placed too much trust in the defendant’ when they set his bail terms.
She said the prosecution now believes it is ‘not possible to design a set of adequate release conditions’ before he goes on trial, and the only way to protect the case would be to lock him up.
Bankman-Fried’s defense team also said Wednesday they would accept a gag order if the judge hands one down, but asked it to be equally applied to others involved in the case.
They noted that the restrictions on publicly speaking about the trial should count for ‘the government and all potential witnesses in this case’, likely meaning Ellison.
Leaked messages written by Caroline Ellison offered a glimpse at her life as CEO of Alameda Research, where she noted being ‘overwhelmed’ by the role
In a hearing in February, Kaplan placed restrictions on Bankman-Fried’s ability to message ex-colleagues at FTX after he allegedly coercing his former company’s legal counsel.
The move saw him breach the conditions of the largest bail in US history when he sent a text to his former legal team saying: ‘I know it’s been a while since we’ve talked. And I know things have ended up on the wrong foot.
‘I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other. I’d love to get on a phone call sometime soon and chat.’
Bankman-Fried has been under house arrest since he was granted the sensational bail amount last year, remaining in his parents’ home in Palo Alto, California.