Court imposes gag order on FTX founder after prosecutors accuse him of witness tampering.
FTX founder Sam Bankman-Fried’s bail conditions have been tightened after United States prosecutors accused him of witness tampering by sharing a former romantic partner’s personal writings with a reporter.
Judge Lewis A Kaplan imposed a “gag order” restricting Bankman-Fried’s ability to speak publicly and said he would consider prosecutors’ request to jail the former billionaire until the first of two trials in October.
“I am certainly very mindful of his First Amendment rights, and I am very mindful of the government’s interest here, which I take very seriously,” Kaplan told a Manhattan federal court on Wednesday. “And I say to the defendant, Mr Bankman-Fried: You better take it seriously, too.”
Assistant US Attorney Danielle Sassoon said Bankman-Fried “crossed a line” when he shared personal correspondence by Caroline Ellison, the former CEO of FTX offshoot Alameda Research, with the New York Times, which published an article detailing how Ellison had been “unhappy and overwhelmed” at her job and upset over her breakup with Bankman-Fried.
Ellison has agreed to testify against Bankman-Fried as part of a deal for leniency after admitting to charges that carry a punishment of up to 110 years in prison.
Bankman-Fried’s lawyer Mark Cohen said his client should not be punished for seeking to protect his reputation, including through the media.
Kaplan gave both sides until August 3 to make their case for whether Bankman-Fried should be taken into custody until he goes on trial for allegedly cheating investors and looting FTX customer deposits.
Bankman-Fried has pleaded not guilty to 13 fraud and conspiracy charges against him.
The 31-year-old crypto entrepreneur has been free on a $250m bond since his extradition from the Bahamas but has been required to stay at his parents’ home in California and had his electronic communications limited.
The one-time crypto icon was feted as one of the world’s youngest billionaires and a visionary in his field until the speculator collapse of FTX last year amid allegations of massive fraud.