February 26, 2024



FTX founder Sam Bankman-Fried agreed to a gag order preventing him from discussing his case publicly after prosecutors accused him of defaming witness Caroline Ellison.

Bankman-Fried has come under fire for an interview with The New York Times that prosecutors say constitutes witness tampering.

Bail status in jeopardy

The gag order prohibits the founders of FTX from making any public statements related to the lawsuit, FTX, and those involved. Judge Lewis Kaplan, who is presiding over the case, will rule on whether a gag order is required at a hearing in the proceedings scheduled for July 26. The judge will also review the “adequacy and continuity” of Bankman-Fried’s bail, suggesting his current bail status may be in jeopardy.

The proposed order prohibits Bankman-Fried and others connected to the proceedings from discussing with the media anything that might interfere with a fair trial. This includes statements about the credibility of witnesses, information not admissible during the trial, and any statements or opinions about the case that may affect the public. The order also applies to lawyers. However, this did not prevent Bankman-Fried from affirming his innocence.

new york times story

Bankman-Fried came under criticism after the New York Times published a story.The focus of the story is Caroline EllisonCEO of Alameda Research, and spoke of writings found in her personal diaries and Google Docs that appear to indicate her ambivalence about her relationship with SBF and her role at FTX. These were written by Ellison when he was the head of Alameda Research, before FTX collapsed. She also spoke about her struggles leading Alameda, which she described as “overwhelming.”

After the incident, federal prosecutors launched a scathing attack on the SBF, accusing him of leaking stories to newspapers and showing their witnesses under dire circumstances. They also allege it was malicious jury influence on witnesses.

“In addition to tarnishing the jury, the effect, if not the intent, of defendant’s conduct was not only to harass Ellison, but also to deter other potential trial witnesses from testifying.”

no offence

In a letter sent to Judge Kaplan, Bankman-Fried’s lawyers confirmed that the former FTX CEO had met with reporters, adding that he provided them with Ellison’s documents. They have, however, denied all allegations of witness tampering alleged by the prosecution. Bankman-Fried’s lawyers argued that the prosecution’s allegations were baseless and that he shared the documents with reporters without malice.

“(SBF) did not breach the protection order, bail conditions, or any law or rule in this case.”

Additionally, the defense said Bankman-Fried will agree to the gag order and refrain from discussing or making public statements about the case. However, they believe the gag order should also apply to the prosecution and all witnesses, including current FTX CEO John Ray. Bankman-Fried’s attorneys argued that while the case was still pending, Ray publicly defamed and attacked their client and continued to paint him as a villain.

Bankman-Fried placed under house arrest

Bankman-Fried Judge Kaplan has summoned him following the charges and the judge was skeptical about his bail conditions. He has warned Kaplan has warned SBF that if he does not reduce his use of VPN programs and encrypted messaging apps, he could end up in jail again.

The former CEO is currently under house arrest at his parents’ California home as part of a $250 million bail. However, bail conditions have been tightened twice. Visitors must now hand over their devices to guards at the front gate. Additionally, Bankman-Fried’s internet use was strictly monitored and he was prohibited from using certain encrypted applications and contacting witnesses. The second condition came after he messaged potential witnesses and emailed John Ray.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.