Sam Bankman-Fried’s bail restrictions were tightened by a U.S. judge on Wednesday. He also stated he would consider imprisoning Bankman-Fried before his FTX bitcoin exchange failure trial.
Indicted FTX founder Sam Bankman-Fried walks outside at the United States Courthouse in New York City, U.S., July 26, 2023. (Source: REUTERS)
Prosecutors’ Detention Order Due to Witness Tampering
According to the report published by US News at a hearing in federal court in Manhattan, prosecutors requested that U.S. Bankman-Fried ordered to be detained by District Judge Lewis Kaplan because in what they claimed to be a second instance of witness tampering, he had “crossed a line” by giving a reporter access to the private writings of his ex-girlfriend Caroline Ellison.
The 31-year-old Bankman-Fried was given a “gag order” by Kaplan, who also granted both parties until August 3 to present their arguments regarding whether or not the former billionaire should be imprisoned. Mark Cohen, claimed that his client was just attempting to safeguard his name by speaking with the media and that it “really would be almost impossible” to prepare for the trial on October 2 if Bankman-Fried were imprisoned.
Since his repatriation from the Bahamas, where he was detained and where FTX was domiciled, in December, Bankman-Fried has spent the majority of his time restricted to his parents’ Palo Alto home. In response to allegations that he misappropriated billions of dollars in FTX client cash to cover losses at his cryptocurrency hedge fund, Alameda Research, he has entered a not-guilty plea. One of three former members of Bankman-Fried’s inner circle who pled guilty to fraud charges and agreed to help with authorities is Ellison, the former CEO of Alameda. She’s anticipated to provide evidence against Bankman-Fried.
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Not the First Time Sam Bankman-Fried Tampered a Witness
The New York Times published a report on Thursday that included quotes from Ellison’s personal Google papers that were created before FTX went down. She spoke of feeling “hurt/rejected” following the end of her relationship with Bankman-Fried and “unhappy and overwhelmed” with her profession.
Although Bankman-Fried acknowledged giving a Times reporter access to Ellison’s writings, Manhattan U.S. Attorney Danielle Sassoon claimed it was the second time he had tampered with a witness. She referenced a January 2023 email that Bankman-Fried sent to FTX’s American general counsel, in which she suggested starting a “constructive relationship.”
According to Sassoon, Bankman-Fried has spoken on the phone with journalists more than 1,000 times. She acknowledged that this by itself did not amount to tampering, but asserted that Bankman-Fried’s plan to restore his reputation looked to be predicated on vilifying and blaming Ellison. Regarding Ellison’s writings, Sassoon continued, that the most recent incident is an escalation of a sustained campaign with the press that has now crossed a line. “The First Amendment does not apply to this.”
Sassoon was also worried about what Bankman-Fried might have revealed to best-selling novelist Michael Lewis, who intends to release a book about FTX around the time the trial starts. Bankman-Fried had previously agreed to a gag order but requested that it also extend to additional witnesses including current FTX CEO John Ray. After FTX declared bankruptcy in November, Ray, a seasoned bankruptcy professional, was elected CEO. Since then, Ray has been a vocal opponent of Bankman-Fried.
At the hearing on Wednesday, Sassoon stated that Ray was not expected to testify by the prosecution. An accusation accusing Bankman-Fried of breaking American campaign financing regulations would no longer be brought up at his future trial, the prosecution announced in a court filing later that day.
