Prosecutors Propose Gag Order on FTX Founder to Stop Contact with Media

Lewis Kaplan, the judge presiding over the case between the United States and Sam Bankman-Fried, the Founder of bankrupt crypto exchange, FTX, may consider issuing a gag order proposed by the US Attorney’s Office, according to media reports. US prosecutors reportedly filed a draft of the order in a letter to the US district court in New York today (Monday).

DoJ Accuses Bankman-Fried of Leaking Diary

The proposed order comes days after the Department of Justice (DoJ) accused Bankman-Fried of sharing with the media personal documents belonging to Caroline Ellison, his former ally and romantic partner. The order, according to CoinDesk, will bar parties, attorneys and agents involved in the case from “publicly disseminating or discussing with any public communications media anything about the case which could interfere with a fair trial.”

The order will also prohibit the parties from making statements intended to influence public opinion on the merit of the case. In addition, it will forbid statements about the identity, testimony or credibility of prospective witnesses, particularly information that has not been considered admissible at trial. However, the order does not prohibit speaking on information already available in public court filings or claims of innocence, according to Cointelegraph.

Finance Magnates reported that the DoJ alleged that ‘personal and raw’ details about Ellison contained in a New York Times article published last week were disclosed by Bankman-man. In the court filing, the federal prosecutor contended that Bankman-Fried made the move to interfere with a ‘fair trial’ by an impartial jury. He allegedly sought to publicly discredit a government witness and cast Ellison ‘in a poor light’.

As a result, the DoJ asked the court to issue an order that limits extrajudicial statements by parties and witnesses likely to interfere with a fair trial. The enforcement agency noted that Ellison, who pleaded guilty to criminal charges last year, is cooperating with public authorities to testify against Bankman-Fried in his upcoming trial billed to start in October.

Bankman-Fried ‘Did Nothing Wrong’

Meanwhile, Bankman-Fried’s lawyers, in response to federal prosecutors, said the crypto exchange's Founder “did nothing wrong.” In a court filing submitted on Sunday, the crypto entrepreneur's counsel consented to a court order limiting extrajudicial statements but argued that the order must apply ‘equally’ to all parties and witnesses.

“This would include all current and former employees of FTX, Alameda Research, and the FTX Debtor entities, including John Ray,” the lawyers noted. Finance Magnates reported that Ray in the past criticized Bankman-Fried’s management of the exchange, saying the business saw a ‘complete failure of corporate controls’ under the Founder.

Bankman-Fried, who has failed to successfully dismiss several of the federal criminal charges filed against him by the DoJ, has pleaded not guilty to the allegations. FTX collapsed last year under Bankman-Fried’s leadership. Some of the charges against him include conspiracy to commit securities fraud and violate the anti-bribery provisions of the Foreign Corrupt Practices Act.

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