Disgraced FTX founder Sam Bankman-Fried is set to appear in a Manhattan federal court on Friday afternoon, where a judge could decide whether he must report to jail while awaiting trial for allegedly bilking customers out of billions of dollars.
Federal prosecutors will argue their position on why Bankman-Fried should be placed in jail before the trial. The feds previously stated that the ex-kingpin had “crossed a line” and committed witness tampering by leaking the personal writings of his former lover and business associate Caroline Ellison to a New York Times reporter.
US District Judge Lewis Kaplan, who is presiding over the case, could make a determination on whether to revoke Bankman-Fried’s bail conditions by as soon as Friday.
At a hearing in late July, Kaplan had issued a gag order that would remain in place until he could make a proper ruling.
Bankman-Fried’s defense attorney Mark Cohen said his team had been blindsided by the prosecutors’ motion and argued that Bankman-Fried’s bail terms permitted him to speak with the media.
Cohen reminded the court that Bankman-Fried’s bail terms allowed him to speak with reporters, and to stop that would be infringing on his right to speak to the press.
Cohen also noted that his client has had “many, many negative stories” published about him and his relationships and argued Bankman-Fried’s media outreach was meant “to protect his reputation” ahead of the trial.
The 31-year-old has been held under house arrest at his parents’ house in Palo Alto, California, since his release last December on a record $250 million bond.
He has pleaded not guilty to various fraud charges related to his cryptocurrency empire’s collapse last year.
Ellison served as CEO of Bankman-Fried’s crypto hedge fund Alameda Research until its collapse last year.
She has already pleaded guilty to fraud charges and is expected to be a key witness against Bankman-Fried when the trial kicks off later this year.
In the writings, which dated back prior to FTX’s downfall, Ellison fretted about her on-again, off-again relationship with Bankman-Fried and its impact on their working environment.
In one entry from February 2022, Ellison reportedly wrote that they risked “making things weird” and “causing drama” at the company and worried that “it doesn’t really feel like there’s an end in sight,” the Times reported.
In another post addressed to Bankman-Fried in April 2022, Ellison wrote that an earlier breakup with him had “significantly decreased my excitement about Alameda.”
She added that she “felt too associated with [Bankman-Fried] in a way that was painful.”
Ellison and two other former FTX executives, Nishad Singh and Gary Wang, have agreed to cooperate in the case against Bankman-Fried.
Bankman-Fried is alleged to have misused billions in FTX customer funds to fund a lavish lifestyle and prop up risky bets at Alameda.
He has denied wrongdoing.
The trial is set to begin on Oct. 2.
With Post wires