FTX: ban on public speaking for Sam Bankman-Fried?



A federal judge will soon be required to decide whether former FTX CEO and co-founder Sam Bankman-Fried should be banned from speaking publicly about his case. 

Indeed, in the text of an order filed Monday, the US Attorney’s Office for the Southern District of New York explicitly asked the judge to prohibit SBF from being able to speak publicly about the FTX case because he would not be allowed to do so, even through third parties such as family members. 

FTX: the issue related to Sam Bankman-Fried

The issue is related to the fact that Sam Bankman-Fried is accused of leaking former colleague Caroline Ellison’s private diary to the media. 

Ellison was also SBF’s romantic partner for a time, to the extent that she even became CEO of Alameda Research, the speculative arm of the FTX group. 

Ellison is said to have lost billions of dollars in high-risk speculation, and may have been part of the problem that forced FTX to file for bankruptcy, along of course with SBF’s own reckless behavior. 

A few days ago, the US Department of Justice explicitly accused Sam Bankman-Fried of leaking Caroline Ellison’s private diary, violating rules regarding how defendants must behave while the case is still pending. 

This diary ended up in the media, so much so that the New York Times published an article reporting some of the writings found in that diary. 

According to the Justice Department, it was the SBF itself that got the diary to the media in an attempt to discredit her. 

The assumption is that because Ellison had pleaded guilty, she would have to testify at the trial against SBF, stating that she had agreed with the defendant to defraud clients and investors, so there would be an attempt underway to discredit her reputation prior to her statement in court. 

The statements of the lawyer

The lawyer defending Sam Bankman-Fried stated that his client, in his opinion, would not have done anything wrong.

He recounted that a journalist contacted SBF and asked if he wanted to respond to an article about Caroline Ellison that he had in the works and was about to be published. The defendant allegedly spoke with the journalist and also shared with him some documents he had come into possession of before he was arrested. 

These documents were allegedly sent to the journalist to confirm the statements made to him, in an attempt to give completeness to SBF’s version of events. 

This would seem to confirm the DOJ’s suspicions, at least in part, but could hardly be justified as lawful behavior in such a situation, especially if that documentation had not also been previously submitted to the court. 

Therefore, it is not surprising that the prosecutor sought an additional restraining order. 

The consequences

At this point, the prosecutor decided to ask the judge for an order expressly prohibiting SBF from interacting with the media, either directly or indirectly, in order to prevent unauthorized leaks such as the one that hypothetically just occurred. 

This would serve to prevent Sam Bankman-Fried from influencing the outcome of the trial through actions outside the courtroom. 

However, the order would not prohibit SBF from asserting his innocence. 

SBF’s lawyer would seem to agree that his client should not speak publicly, but asked that the ban be extended to all other parties and witnesses, including the current management of FTX

As a matter of fact, from November until now SBF has provided many public statements. Even before his arrest he continued to tweet freely. 

When he was put under house arrest in the US, he was placed under several restrictions, not only of course with regard to travel, but also and especially with regard to interactions with others. 

One of these is precisely the restriction on the use of public communication tools such as social networks. 

It is hard to imagine that in such a scenario he would be allowed to speak freely with the media, directly or indirectly, so in theory it is possible that the judge could opt to approve the prosecutor’s request.