FTX Founder Sam Bankman-Fried Must be Jailed Before Trial for Witness Tampering

FTX Founder Sam Bankman-Fried Must be Jailed Before Trial for Witness Tampering – U.S. Justice Department

Updated: 28 July 2023

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The U.S. Department of Justice (DoJ) called for the detention of FTX founder Sam Bankman-Fried until his criminal trial, citing alleged attempts to tamper with witnesses.

Bankman-Fried appeared in a federal court with his legal team on Wednesday, where the DoJ said he shared documents with the New York Times to undermine the credibility of star witness Caroline Ellison, the former CEO of FTX affiliate Alameda Research.

OK – now at US v. Bankman-Fried, hearing on US request to remand SBF to jail after leak of Caroline Ellison's Google docs to NYT – and about sealed list of secret visitors? Inner City Press has asked to unseal that, and will live tweet, thread below pic.twitter.com/2RGMWagZuQ

— Inner City Press (@innercitypress) July 26, 2023

“It is the government’s view that no set of release conditions can secure the safety of the community,” said Assistant U.S. Attorney, Danielle Sassoon. “It appears to be undisputed the defendant provided the documents quoted [in the New York Times] … to discredit [Ellison].”

The DoJ contends that he did this with the intention of discrediting Ellison, a key witness in the case against him. Sassoon said “Having contact with the press alone isn’t witness-tampering” but argued that Bankman-Fried “crossed a line toward inappropriately influencing jurors, intimidating [the] witness and sending a message to other prospective jurors”, when he set out to tarnish Ellison in an international publication read by many potential jurors in the New York-based case.

Ellison had previously admitted to fraud charges in connection with the FTX collapse and reached an agreement with DoJ to assist the prosecution in the case against Bankman-Fried.

Sassoon highlighted Bankman-Fried’s extensive communication with reporters and journalists, including over 100 emails and more than 100 phone calls to the New York Times reporter who authored the article.

The prosecution also expressed concern about more than 500 phone calls with author Michael Lewis, who is working on a book titled Focused on the collapse of FTX.

Judge Sets Swift Timeline for Written Arguments

Judge Lewis A. Kaplan, presiding over the case in the Southern District of New York, set a prompt schedule for both the prosecution and the defence to submit written arguments on the matter.

The DOJ has until Friday to file its response, and the defense has until Tuesday. The prosecution can then submit a final response by August 3.

During the hearing, defense attorney Mark Cohen argued that Bankman-Fried was not attempting to discredit Ellison but rather had a strategy to respond to reporters in an effort to shape public perceptions about him. Cohen acknowledged that while this might not be the best approach, his client’s desire to protect his reputation was understandable.

Cohen also pointed out that remanding Bankman-Fried in jail could hinder the defense’s ability to organize the large volume of documents required for the case, which are accessible through online tools.

Judge Kaplan raised concerns about Bankman-Fried’s conduct while on bail and referred to a prior communication with former FTX.US general counsel Ryne Miller, which the court considered potentially amounting to witness tampering.

The judge concluded the hearing by cautioning Bankman-Fried to take the matter seriously and implemented an interim gag order, prohibiting the FTX founder from communicating with the press or making public statements until Kaplan reviews written submissions and makes a decision on whether to revoke his bail.

FTX Founder Prohibited From Communicating With the Press

Bankman-Fried is facing fraud charges related to FTX’s collapse. The 31-year-old entrepreneur, once a star of the cryptocurrency world, has been free on a record $250 million bond since his extradition from the Bahamas in December.

As part of his bail conditions, Bankman-Fried is required to remain at his parent’s residence in Palo Alto, California, with strict limitations on his electronic communications.

The trial for the initial charges is scheduled for October, while a second trial for additional charges, including bank fraud and bribery allegations, is planned for March next year.