The FTX Scandal Continues: Sam Bankman-Fried accused of leaking private messages
The FTX Scandal
Since the FTX Scandal started back in December 2022, new developments show significant potential for the regulation of crypto assets. The FTX crypto exchange founder, who was crowned the King of Cryptocurrency, is accused of orchestrating years-long fraud, victimising thousands of customers by diverting billions in stolen deposits to repay his trading firm Alameda Reserach’s debts, amongst other related crimes. He was then hit with more charges after his extradition in the multibillion-dollar fraud case, including bank fraud conspiracy, pumping millions in masked donations to Republicans and Democrats to influence crypto legislation, and bribing Chinese officials to unfreeze $1 billion in his trading accounts.
New Developments
A judge has required the former FTX CEO Sam Bankman-Fried to attend a hearing after federal prosecutors accused him of leaking the personal writings of his former girlfriend and business associate Caroline Ellison to the New York Times. According to court records, US District Court Judge Lewis Kaplan has also asked the parties to be prepared to revisit the conditions of Bankman-Fried’s bail.
In this new development, federal prosecutors have accused Bankman-Fried of witness tampering after he allegedly leaked Ellison’s personal writings. In a letter to US District Court Judge Lewis Kaplan, prosecutors accused Bankman-Fried of giving the New York Times Ellison’s writings to ‘interfere with a fair trial by an impartial jury’.
In an article titled ‘Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case,’ the New York Times published private diary entries that Ellison write in Google Docs, detailing her ‘unhappy and overwhelmed’ emotional state as CEO of Alameda Research, FTX’s crypto hedge fund. The writings expressed her doubts about her ability to make decisions and effectively run the business. In December, Ellison pleaded guilty to multiple counts of conspiracy and fraud for her role in a scheme that led to the collapse of FTX. Prosecutors say she is expected to serve as a witness in their criminal case against Bankman who has pleaded not guilty to eight federal counts of fraud and conspiracy.
In the letter to Kaplan, prosecutors said they became aware earlier in the week that an article was forthcoming, alleging that Bankman’s attorneys confirmed he sat down with the newspaper and handed over documents that were not part of the discovery materials.
‘“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defence through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone,” US Attorney Damian Williams
“While the Government expects the overwhelming evidence to give the lie to this defence, it is prejudicial and improper for the defendant to malign Ellison’s credibility in advance of trial, particularly with materials that the defence has not established are admissible at trial, much less produced to the government.”
Prosecutors are now seeking to limit Bankman’s ability to make public statements out of fear that he could influence the jury pool, leaving a chilling effect on witnesses while seeking to discredit Ellison as a ‘jilted lover’.
By
Esther Zhang