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FTX Founder Sam Bankman-Fried Faces Tightened Bail Conditions and Possible Jail in Trial

Ruholamin Haqshanas
Last updated: | 2 min read
Source: YouTube / ABC News

Sam Bankman-Fried, the founder of now-defunct cryptocurrency exchange FTX, is facing tightened bail conditions and the possibility of jail time as he awaits trial over the collapse of his exchange. 

At a recent hearing, US District Judge Lewis Kaplan imposed a “gag order” on Bankman-Fried, restricting his ability to communicate publicly, Reuters reported Thursday

The decision came after prosecutors argued that he crossed a line by sharing personal writings of his former romantic partner Caroline Ellison with a reporter, potentially tampering with a witness.

The hearing, held in Manhattan federal court, saw prosecutors request that Bankman-Fried be detained immediately, citing his actions as a second instance of witness tampering. 

“It is the government’s view that no set of release conditions can secure the safety of the community,” Danielle Sassoon, an assistant US attorney, said. 

“It appears to be undisputed the defendant provided the documents quoted [in the New York Times] … to discredit [Ellison].”

However, Bankman-Fried’s lawyer, Mark Cohen, argued that his client was merely trying to protect his reputation by communicating with journalists.

He also expressed concerns about the impact of jail time on Bankman-Fried’s ability to prepare for the upcoming trial scheduled for October 2. 

The judge decided to impose the gag order but gave both sides until August 3 to present their arguments on whether jail time is necessary for Bankman-Fried.

Bankman-Fried has pleaded not guilty to charges of stealing billions of dollars in FTX customer funds to cover losses at his crypto hedge fund, Alameda Research. 

Three former members of his inner circle, including Caroline Ellison, have pleaded guilty to fraud charges and are cooperating with prosecutors. Ellison is expected to testify against Bankman-Fried.

Bankman-Fried Shares Ellison’s Writings With Reporters

The New York Times recently published an article containing excerpts from Ellison’s personal Google documents before FTX’s collapse. 

In the documents, she expressed dissatisfaction with her job and the end of her personal relationship with Bankman-Fried. 

Prosecutor Sassoon argued that this incident was just the latest in Bankman-Fried’s campaign to discredit and blame Ellison. 

She revealed that Bankman-Fried had sent over 100 emails and had over 100 phone calls with a Times reporter who wrote the article. 

Sassoon further expressed concerns about what Bankman-Fried might have revealed to author Michael Lewis, who plans to publish a book about FTX around the time of the trial. 

Meanwhile, in a court filing later in the day, prosecutors announced that they would no longer include a charge accusing Bankman-Fried of violating US campaign finance laws in the upcoming trial.

The charge was dropped after The Bahamas did not include it in its extradition treaty, according to a court filing late Wednesday.  

The new scrutiny against Bankman-Fried comes as recent court revelations have exposed a web of deceit surrounding his family

For one, it was revealed that Samuel Bankman, Bankman-Fried’s father, who has been using the $10 million gifted to him by his son, which was allegedly looted from FTX customers, to pay for his legal defense.