**FTX Founder Accused of Harassing Key Witness Ahead of Trial**
Prosecutors Request Order to Prevent Tainting of Jury
Prosecutors have accused FTX founder, Sam Bankman-Fried, of harassing a crucial witness in his upcoming trial by leaking personal documents she wrote while serving as the chief executive of his cryptocurrency hedge fund trading firm. To prevent the potential tainting of the jury, prosecutors have requested a judge to order trial participants not to make statements regarding the case. The criminal case against Bankman-Fried and other top executives involves allegations of cheating investors, looting FTX customer deposits, and using the funds to finance extravagant lifestyles.
Prosecutors Claim Harassment of a Government Witness
In a letter addressed to Judge Lewis A. Kaplan, prosecutors raised concerns about Bankman-Fried’s actions, stating that he provided Caroline Ellison’s personal correspondence to The New York Times. According to prosecutors, this act was intended to harass Ellison and deter potential trial witnesses from testifying. They described it as an attempt to publicly discredit the government witness and interfere with the trial scheduled for October 2nd.
Caroline Ellison’s Background and Guilty Plea
Caroline Ellison, 28, previously served as the CEO of Alameda Research, a cryptocurrency hedge fund trading firm associated with FTX. However, FTX eventually entered bankruptcy in November after experiencing a financial crisis akin to a bank run. Ellison pleaded guilty to criminal charges in December, which carry a potential prison sentence of up to 110 years. As part of a plea deal, she has agreed to testify against Bankman-Fried, opening the possibility of leniency in her sentencing.
Bankman-Fried’s Lawyer Confirms Sharing Documents
Prosecutors revealed that Bankman-Fried’s lawyers confirmed the sharing of documents with The New York Times that were not current trial evidence. The newspaper subsequently published an article titled “Private Writings of Caroline Ellison, Star Witness in the FTX Case.” The article featured portions of Ellison’s writing where she expressed doubts about her suitability for running Alameda and her decision-making ability as a leader. These doubts coincided with the breakup of her sporadic romantic relationship with Bankman-Fried.
Prosecutors Withhold Judgment on Incarceration
Despite the troubling nature of Bankman-Fried’s actions, prosecutors stopped short of requesting pre-trial incarceration. They did, however, highlight the expectation that Ellison would testify about her involvement in defrauding FTX’s customers and investors, as well as Alameda’s lenders. Prosecutors accused Bankman-Fried of attempting to cast Ellison in a negative light and advance his defense through media channels, arguing that she acted alone out of spite as a jilted lover. They expressed confidence that the overwhelming evidence would discredit this narrative and emphasized the impropriety and prejudice of maligning Ellison’s credibility before the trial.
Concerns Raised about Witness Testimony and Media Attention
Prosecutors also addressed concerns raised by lawyers representing potential trial witnesses, particularly those residing abroad. These lawyers reported that their clients were apprehensive about testifying in a case that has attracted persistent media attention. Prosecutors argued that witness concerns would be exacerbated if witnesses feared personal humiliation and efforts to discredit their reputations beyond the permissible bounds of evidence during cross-examination.
Previous Concerns about Bankman-Fried’s Actions
Earlier this year, Judge Kaplan indicated the possibility of incarcerating Bankman-Fried after prosecutors expressed concerns about his attempts to circumvent restrictions on electronic communications. Bankman-Fried is currently subject to a $250 million personal recognizance bond, imposed after his arrest in December, that requires him to reside with his parents in Palo Alto, California. In February, prosecutors alleged that he might have attempted to influence a witness by sending an encrypted message to a top FTX lawyer expressing his desire to reconnect and explore opportunities for a constructive relationship.
Judge’s Observations on Bankman-Fried’s Conduct
During a February hearing, Judge Kaplan acknowledged prosecutors’ descriptions of Bankman-Fried’s post-arrest actions, suggesting that he may have committed or attempted to commit a federal felony while on release. These observations further underscore the concerns raised by prosecutors regarding Bankman-Fried’s conduct and its potential impact on the trial.