FTX’s Bankman-Fried denies witness tampering, accepts gag order

Prosecutors seek to bar cryptocurrency exchange founder and his allies from making public statements that could interfere with the case.

A portrait of Sam Bankman-Fried. He has dark, curly hair and looks serious
Prosecutors say disgraced cryptocurrency titan Sam Bankman-Fried's conversations with a journalist amounted to witness tampering [File: Saul Loeb/AFP]

Lawyers for FTX founder Sam Bankman-Fried have rejected prosecutors’ claims that his discussions with a New York Times reporter amounted to witness tampering but agreed to accept a gag order, they say in a letter to the judge in the criminal fraud case.

The letter, released on Sunday, came after prosecutors sought to bar Bankman-Fried and his allies from making public statements that could interfere with the case. The defence asked that the order also apply to prosecutors and potential witnesses, namely FTX Chief Executive Officer John Ray.

United States District Judge Lewis Kaplan is set to consider the possible order during a hearing on Wednesday in federal court in Manhattan.

Cryptocurrency exchange FTX, once valued at $32bn, filed for bankruptcy in November. Bankman-Fried has pleaded not guilty to charges he stole customer funds and is set to go on trial on October 2.

In the letter, Bankman-Fried’s lawyer Mark Cohen confirmed his client had spoken with a New York Times reporter and provided documents written by former colleague and girlfriend Caroline Ellison, who has cooperated with prosecutors.

The July 20 New York Times article reported excerpts from Ellison’s personal Google documents from before the collapse of FTX in which she spoke about being “pretty unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her breakup with Bankman-Fried.

Ellison led Bankman-Fried’s Alameda Research hedge fund and has pleaded guilty to defrauding investors. In December, Bankman-Fried said he and Ellison had been in a relationship but gave no further details.

Cohen said Bankman-Fried’s conduct “did not violate the protective order in this case, nor did he violate his bail conditions, nor did he violate any law or rule”.

In arguing the order should also apply to Ray, Cohen said FTX’s current leader has “attacked and vilified” Bankman-Fried, pointing to his comment that the “villains” in the FTX case were being pursued by authorities and his statement that Bankman-Fried lied to keep up a “digital con game”.

A spokesperson for the FTX debtors declined to comment. A spokesman for the US Attorney’s Office in Manhattan, which is prosecuting the case, did not immediately respond to a request for comment.

Source: Reuters