Sam Bankman-Fried Accepts Restriction on Speech to Avoid Jail Time

Sam Bankman-Fried, the founder of FTX, has consented to a gag order that significantly restricts his ability to publicly address his case. This decision comes in response to prosecutors’ allegations that he attempted to undermine the credibility of their key witness, Caroline Ellison.

The order still has to be approved by U.S. District Judge Lewis A. Kaplan, who has subpoenaed the former CEO on Wednesday. The judge is addressing the “adequacy and continuance” of Bankman-Fried’s bail, suggesting her current house arrest could be in jeopardy.

The order, filed Monday in federal court in Manhattan, would bar Bankman-Frid and other parties from talking to the press about anything that could interfere with a fair trial. It would include statements about the credibility of witnesses, information that is not admissible at trial, and anything that could influence public opinion about the case. The proposed order, which prosecutors filed, also applies to lawyers, but does not prevent the 31-year-old from maintaining his innocence.

Bankman-Fried, accused of orchestrating a multibillion-dollar fraud at a bankrupt crypto exchange, came under renewed scrutiny last week in the New York Times after a story 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 company. He also sometimes dated Bankman-Fried.

The story was based on Ellison’s writings in Google Docs and personal diaries. The excerpts appeared to reveal Ellison’s ambivalence about his role in FTX and his relationship with Bankman-Fried.

Federal prosecutors filed an accusatory letter accusing Bankman-Fried of leaking the material to a newspaper “to discredit Ellison and advance his defense through the press.”

In a letter sent Sunday, Bankman-Fried’s lawyers said the SBF shared documents obtained before her arrest “in an attempt to give her side of the story that has already been covered in the media.”

In contrast to their position on Bankman-Fried, her attorneys claimed that prosecutors had “stood by silently” while FTX’s new CEO, John J. Ray, publicly attacked and vilified their client. Even so, 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 go on trial in October after pleading not guilty to fraud and campaign finance law violations. A spokeswoman for the U.S. Attorney’s Office in Manhattan did not immediately respond to a request for comment.

In light of last week’s allegations, Judge Kaplan subpoenaed Bankman-Fried. Kaplan has been skeptical of Bankman-Fried’s bail restrictions, even warning in the past that she could face jail time if she doesn’t control her use of encrypted messaging apps and VPNs.

She was under house arrest at her parents’ home in Palo Alto, Calif., as part of a $250 million bail negotiated after her arrest in December, and Bankman-Fried’s conditions have been increased at least twice.

All visitors to his house must hand over electronic devices to the guard at the front door, and his internet use is strictly controlled. He has been banned from using encrypted messaging apps and from contacting witnesses after he emailed Ray after the FTX debacle and messaged a potential witness.

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