US judge tightens Sam Bankman-Fried's bail restrictions, will consider jailing him before FTX bitcoin exchange trial

A US court increased Sam Bankman-Fried’s bail restrictions on Wednesday, limiting his capacity to speak publicly, and indicated he will consider jailing him before his FTX bitcoin exchange trial. Prosecutors asked US District Judge Lewis Kaplan to detain Bankman-Fried immediately at a hearing in Manhattan federal court, saying he had “crossed a line” by sharing his former romantic partner Caroline Ellison’s personal writings with a reporter, which they said amounted to a second instance of witness tampering. Kaplan issued a “gag order” for the 31-year-old Bankman-Fried, as asked by prosecutors, and gave both parties until 3 August to explain their positions on whether the former millionaire should be imprisoned. “I’m very mindful of the government’s interest in this issue, which I take seriously,” Kaplan said. “Mr. Bankman-Fried, you’d better take it seriously too.” Bankman-Fried’s lawyer, Mark Cohen, stated that his client was only attempting to defend his image by interacting with the media and that it would be “really almost impossible” to prepare for the 2 October trial if Bankman-Fried was imprisoned. Bankman-Fried has been confined to his parent’s house in Palo Alto, California, since his repatriation from the Bahamas, where he was detained and FTX was based, in December. He has pled not guilty to allegations that he misappropriated billions of dollars in FTX client cash to help his crypto hedge fund, Alameda Research, cover losses. Ellison, the former CEO of Alameda, is one of three former members of Bankman-Fried’s inner circle who have pled guilty to fraud charges and agreed to assist with authorities. She will most likely testify against Bankman-Fried. More than 1,000 calls with reporters Last Thursday, the New York Times published an article containing excerpts from Ellison’s personal Google documents prior to FTX’s collapse. She described being “unhappy and overwhelmed” with her job and feeling “hurt/rejected” from the break up of her personal relationship with Bankman-Fried. Though Bankman-Fried acknowledged sharing Ellison’s writings with a Times reporter, prosecutor Danielle Sassoon from the Manhattan US Attorney’s office said it constituted the second time he had tampered with a witness. She cited a January 2023 email to FTX’s US general counsel, in which Bankman-Fried proposed entering a “constructive relationship.” Sassoon said Bankman-Fried has had more than 1,000 phone calls with journalists. She said this alone did not constitute tampering, but said Bankman-Fried’s strategy for rehabilitating his reputation appeared built on discrediting and blaming Ellison. “This latest incident is an escalation of an ongoing campaign with the press that has now crossed a line,” Sassoon said, referring to the Ellison writings. “This isn’t a First Amendment issue.” Sassoon also expressed concern about what Bankman-Fried might have told the best-selling author Michael Lewis, who plans to publish a book about FTX around when the trial begins. Bankman-Fried had previously consented to a gag order but asked that it also apply to other witnesses such as current FTX Chief Executive John Ray. Ray, a veteran bankruptcy specialist who was named CEO after FTX filed for bankruptcy in November, has since been a strong Bankman-Fried critic. Sassoon said at Wednesday’s hearing that prosecutors did not expect to have Ray testify. Later in the day, prosecutors said in a court filing that they would no longer include a charge accusing Bankman-Fried of violating US campaign finance laws at his upcoming trial.