SBF Agrees To Gag Order After Putting Bail Status In Jeopardy

FTX founder Sam Bankman-Fried has agreed to a gag order that prevents him from publicly discussing his case after prosecutors alleged he was discrediting their witness, Caroline Ellison. 

Bankman-Fried had come under fire for conducting an interview with the New York Times, which prosecutors have claimed amounts to witness tampering. 

Bail Status In Jeopardy 

The gag order prevents the FTX founder from making any public statements related to the lawsuit, FTX, and the people involved with the lawsuit. Judge Lewis Kaplan, who is presiding over the case, will make a ruling on whether the gag order is required at the upcoming hearing for the lawsuit, scheduled on the 26th of July. The judge will also look at the “adequacy and continuation” of Bankman-Fried’s bail, suggesting that his current bail status could be in jeopardy. 

The proposed order bans Bankman-Fried and others associated with the lawsuit from discussing anything with the press that could interfere with a fair trial. This includes statements regarding the credibility of witnesses, information that is not admissible during the trial, and any statement or opinion about the case that could influence the public. The order also extends to attorneys. However, it does not prevent Bankman-Fried from asserting his innocence. 

The New York Times Story 

Bankman-Fried came under criticism following a story published in the New York Times. The story’s focus was Caroline Ellison, the CEO of Alameda Research, and talked about writings found in her personal journals and Google Docs, appearing to show her ambivalence about her relationship with SBF and role at FTX. These were written by Ellison when she was the head of Alameda Research and before the collapse of FTX. She also talked about her struggles when it came to leading Alameda, which she described as “overwhelming.”

Following the story, federal prosecutors launched a scathing attack on SBF, accusing him of leaking stories to newspapers and showing their witness in poor light. They also described it as a malicious effort to influence the jury pool toward the witness. 

“In addition to tainting the jury pool, the effect, if not the intent, of the defendant’s conduct is not only to harass Ellison but also to deter other potential trial witnesses from testifying.”

Nothing Malicious 

Bankman-Fried’s lawyers confirmed in a letter sent to Judge Kaplan that the former FTX CEO had met with reporters, adding that he gave them Ellison’s documents. However, they denied all allegations of witness tampering as alleged by the prosecution. Bankman-Fried’s lawyers argued that the prosecution’s allegations were unfounded and that he had no malicious intention when he shared the documents with reporters. 

“[SBF] did not violate the protective order in this case, nor did he violate his bail conditions, nor did he violate any law or rule.”

Additionally, the defense stated that Bankman-Fried would agree to the gag order and refrain from discussing or making public statements regarding the case. However, they argued that the gag order should also apply to the prosecution, along with all witnesses, including current FTX CEO John Ray. Bankman-Fried’s lawyers argued that Ray had publicly vilified and attacked their client and continues to portray him as a villain, despite the case’s ongoing status. 

Bankman-Fried’s House Arrest 

Bankman-Fried has already been summoned by Judge Kaplan following the accusations, with the judge skeptical regarding his bail conditions. He has already warned Kaplan has already warned SBF that he could end up going back to jail if he did not curtail his use of VPN programs and encrypted messaging apps. 

The former CEO is under house arrest at his parent’s home in California as part of a $250 million bail package. However, the bail conditions have already been tightened twice. Visitors are now required to hand over their devices to a guard at the front door. Additionally, Bankman-Fried’s internet usage is heavily monitored, and he is banned from using certain encrypted applications and contacting witnesses. The second condition was imposed after he messaged a potential witness and emailed John Ray. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.