Federal prosecutors ask judge to jail Bankman-Fried after fallen crypto king leaks ex-girlfriend’s online diary
Federal prosecutors on Wednesday asked a judge to revoke crypto entrepreneur Sam Bankman-Fried’s $250 million bond and jail him pretrial after he leaked his ex-girlfriend and convicted co-conspirator’s digital diary.
Bankman-Fried was ordered to appear in Manhattan Federal Court from Palo Alto, California, days after prosecutors accused him of witness tampering by leaking excerpts of Caroline Ellison’s personal Google Docs notes to The New York Times.
Telling Manhattan Federal Court Judge Lewis Kaplan that prosecutors had “placed too much trust” in Bankman-Fried, Assistant U.S. Attorney Danielle Sassoon said his recent communications with reporters were part of an ongoing media campaign that had now “crossed the line.”
Sassoon said “no set of conditions short of detention” would satisfy the prosecution’s concerns that Bankman-Fried will jeopardize their case before his October trial.
Bankman-Fried is facing a host of charges alleging he orchestrated a yearslong fraud that victimized thousands of customers of his crypto exchange platform FTX.
The feds say he diverted billions in stolen deposits to repay his firm Alameda Research’s debts, among related crimes. He maintains his innocence.
After his extradition, prosecutors brought more charges, alleging he pumped millions in masked donations to elected officials in both parties to influence crypto legislation in Washington and bribed Chinese officials to unfreeze $1 billion in his trading accounts. He’s expected to face those charges at a second trial.
Ellison, 28, is cooperating after pleading guilty to charges following Bankman-Fried’s December arrest. She’s expected to be the star witness at trial. Her personal notes detailed her doubting her ability to run Alameda.
“Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do,” Ellison wrote, describing her worries over lacking “leadership” in an April 2022 entry.
Bankman-Fried previously drew Kaplan’s ire when he was found to have contacted FTX’s general counsel on the messaging app Signal. Days after the judge imposed restrictions on his technology use, he considered jailing Bankman-Fried for using a VPN — short for “virtual private network” — to access his Bahamas TV set to watch the Super Bowl.
On Wednesday, defense attorney Mark Cohen told the judge Bankman-Fried’s legal team learned of prosecutors’ intention to seek his pretrial incarceration one minute before the hearing started, accusing them of hiding the ball.
Cohen said Bankman-Fried had sought to counter an “overwhelming crush of media” stories painting him negatively and believed it was his First Amendment right to speak to the media. He said preparing a defense with Bankman-Fried in jail would be near-impossible.
Kaplan issued a temporary gag order barring Bankman-Fried from discussing anything about the case with the media. He will rule on the government’s motion after considering written arguments from both sides.
The judge said he knew Bankman-Fried needed access to voluminous digital evidence and was “certainly very mindful of his First Amendment rights.”
“And I am very mindful of the government’s interest in this issue, which I take seriously,” the judge said.
“Mr. Bankman-Fried, you better take it seriously, too.”
Bankman-Fried and his lawyers had no comment leaving court.
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