Manhattan federal prosecutors are pushing for the detention of Sam Bankman-Fried, the disgraced cryptocurrency mogul and former FTX CEO, ahead of his fraud trial.
They allege that Bankman-Fried crossed a line by allegedly collaborating with a journalist to exert pressure on a key witness set to testify against him, the New York Post reports.
SAM BANKMAN-FRIED LEAVING COURT — possibly for the last time. Judge may throw him in jail for leaking Caroline Ellison diary entries.https://t.co/JegjxjDAK8 pic.twitter.com/ElzTZn63x1
— Jacob Shamsian ⚖️ (@JayShams) July 26, 2023
During a court hearing, Judge Lewis Kaplan ruled that Bankman-Fried could remain free on bond but imposed a gag order in response to the prosecution’s motion.
Prosecutor Danielle Sassoon argued that Bankman-Fried’s recent actions, involving sharing personal writings from his ex-girlfriend and former head of his failed crypto hedge fund Alameda Research, Caroline Ellison, constituted witness tampering.
The feds claim that Bankman-Fried’s dealings with the press have escalated to an unacceptable level, leading them to request his detention, as they believe no release conditions can guarantee community safety.
The judge refrained from immediate detention and gave both sides until August 3 to present written submissions. The defense attorney, Mark Cohen, objected to the detention request, pointing out that Bankman-Fried’s bail terms allow him to speak with reporters, and restricting this right would infringe on his freedom of speech.
Last week, private writings from Ellison surfaced, detailing her complex relationship with Bankman-Fried. In one entry, she expressed concerns about causing drama at the company due to their on-and-off polyamorous relationship. Another post revealed that an earlier breakup had dampened her enthusiasm about Alameda.
Ellison has already pleaded guilty to federal fraud charges and is cooperating with authorities, along with two other former FTX executives, Nishad Singh, and Gary Wang. They have agreed to assist in the case against Bankman-Fried.
Bankman-Fried’s trial is scheduled for October 4, with allegations including misappropriation of billions of FTX customer funds to cover cryptocurrency hedge fund losses and fund a lavish lifestyle that included extravagant property purchases in the Bahamas.
Currently under house arrest, Bankman-Fried maintains his innocence and has pleaded not guilty to all charges.
