FTX founder Sam Bankman-Fried Agrees to Gag Order With Bail Status in Jeopardy

FTX founder Sam Bankman-Fried has agreed to a gag order largely preventing him from publicly discussing his case after prosecutors accused him of trying to discredit their star witness, Caroline Ellison.

The story was based on Ellison’s writings in Google Docs and in personal journals. (via REUTERS)

 FTX founder Sam Bankman-Fried has agreed to a gag order largely preventing him from publicly discussing his case after prosecutors accused him of trying to discredit their star witness, Caroline Ellison.

The order still needs to be approved by US District Judge Lewis A. Kaplan, who has summoned the former chief executive officer to appear in court Wednesday. The judge will deal with the “adequacy and continuation” of Bankman-Fried's bail, suggesting his current house arrest could be in jeopardy.

According to the proposed order, filed in federal court Manhattan Monday, Bankman-Fried and other parties would be banned from discussing anything with the press that could interfere with a fair trial. That would include statements about the credibility of witnesses, information that isn't admissible at trial and anything that could influence public opinion about the case. The proposed order, which prosecutors filed, extends to attorneys, but doesn't prevent the 31-year-old from asserting his innocence.

Bankman-Fried, who is accused of orchestrating a multi-billion dollar fraud at his now bankrupt crypto exchange, found himself under new scrutiny last week following a story in The New York Times about Ellison's diary. Ellison, who pleaded guilty to fraud in a deal with prosecutors, was the CEO of Alameda Research – FTX's hedge fund affiliate. She also at one point dated Bankman-Fried.

The story was based on Ellison's writings in Google Docs and in personal journals. The excerpts appeared to reveal Ellison's ambivalence about her role at FTX and relationship with Bankman-Fried.

Federal prosecutors filed a scathing letter accusing Bankman-Fried of leaking the material to the newspaper to “cast Ellison in a poor light, and advance his defense through the press.”

Bankman-Fried's lawyers said in a letter filed Sunday that SBF shared documents that had been obtained prior to his arrest “in an effort to give his side of the story about topics that have already been reported in the media.”

In contrast to their stance on Bankman-Fried, his lawyers argued, prosecutors had “stood silent” while FTX's new CEO, John J. Ray, publicly attacked and vilified their client. Regardless, Bankman-Fried would agree to a gag order – if it extended to prosecutors and other potential witnesses.

A spokesman for Bankman-Fried declined to comment. Bankman-Fried is scheduled to face trial in October, having pleaded not guilty to fraud and campaign finance law violations. A spokesman for the US Attorney's Office in Manhattan did not immediately respond to a request for comment.

In light of last week's accusations, Judge Kaplan summoned Bankman-Fried to appear in court. Kaplan has been skeptical of Bankman-Fried's bail restrictions, even warning previously that he could end up in jail if he didn't reign in his use of encrypted messaging apps and VPN programs.

Living under house arrest at his parent's home in Palo Alto, California, as part of a $250 million bail package negotiated following his arrest in December, Bankman-Fried's conditions have already been tightened at least twice.

Any visitors to his house must hand in their electronic devices to a security guard at the front door and his internet usage is heavily monitored. He is banned from using encrypted messaging apps and contacting witnesses after he emailed Ray in the wake of FTX's collapse and messaged a potential witness.

The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).