Judge to Decide on Gag Order for FTX’s Bankman-Fried

Sam Bankman-Fried has reportedly agreed to a gag order banning him from discussing his case in public.

The order, which still needs to be approved by U.S. District Judge Lewis A. Kaplan, was proposed Monday (July 24) in light of accusations by federal prosecutors that Bankman-Fried, the former CEO of now-bankrupt crypto exchange FTX, was attempting to discredit the star witness in his case, former Alameda Research CEO Caroline Ellison, Bloomberg reported Monday.

The scrutiny surrounding Bankman-Fried was heightened after The New York Times released a story last week based on Ellison’s diary, according to the report.

Federal prosecutors accused Bankman-Fried of leaking the material to the newspaper to “cast Ellison in a poor light, and advance his defense through the press,” the report said.

Bankman-Fried’s lawyers responded Sunday (July 23) by saying that he shared documents prior to his arrest “in an effort to give his side of the story about topics that have already been reported in the media,” per the report. They added that Bankman-Fried would still agree to be subject to a gag order — if it extended to prosecutors as well as other potential witnesses.

Kaplan has summoned Bankman-Fried to appear in a New York federal court Wednesday (July 26) to discuss the proposed gag order, according to the report. The judge will decide then whether the order should be approved.

Bankman-Fried has had the conditions of bail tightened twice before. For example, Kaplan ordered Bankman-Fried to stop using encrypted messaging apps and a VPN program, cautioning him that he could end up in jail rather than his current condition of living under house arrest at his parents’ home.

In another recent development in the legal battles around Bankman-Fried, it was reported July 20 that lawyers for FTX have sued Bankman-Fried and three other former executives of the cryptocurrency exchange, alleging that they misappropriated more than $1 billion in the months leading up to FTX’s collapse.

Among the alleged beneficiaries of the misappropriated funds was Ellison, who is accused of paying herself a bonus of $22.5 million, part of which was later transferred to her personal bank account, the Financial Times reported.