US DoJ Accuses FTX Founder of Leaking Caroline Ellison’s Private Diary

US prosecutors have accused Sam Bankman-Fried, the embattled Founder of now-bankrupt cryptocurrency exchange, FTX, of sharing with the media personal documents belonging to Caroline Ellison, his former ally and romantic partner. The Department of Justice (DoJ) made the allegations yesterday (Thursday) in a filing addressed to Lewis Kaplan, the US District Judge presiding over the case between the United States and the ex-CEO of FTX.

US Prosecutors Allege Sabotage

Ellison is the former CEO of FTX’s sister trading firm, Alameda Research. In December 2022, a month after FTX’s collapse, Ellison alongside Zixiao (Gary) Wang, the former Chief Technology Officer of FTX, pleaded guilty to criminal charges initiated by the DoJ. Ellison and Wang also started to cooperate with public authorities in their investigation into FTX’s insolvency.

On Thursday, the New York Times published an article in which it wrote that it reviewed certain Google documents written by Ellison. The documents reportedly contain observations about the personal and professional relationship between the former Alameda Research boss and Bankman-Fried.

The outlet described details in the documents as ‘personal and raw’, adding that the documents illustrate the complexity of the relationship between Bankman-Fried and Ellison. However, the publication did not disclose how it got the document.

In the court filing submitted yesterday, the DoJ attributed the ‘extrajudicial statements’ to Bankman-Fried, noting that the crypto entrepreneur’s lawyers confirmed that the crypto exchange's founder met one of the reporters credited with writing the article in person. The lawyers also reportedly admitted that Bankman-Fried shared documents that are not part of the prosecutors’ discovery material with the said reporter. Providing more details, the enforcement agency said it believes that the documents “likely came from [Bankman-Fried’s] personal Google Drive account.”

Furthermore, Damian Williams, the District Attorney for the Southern District of New York, alleged that Bankman-Fried shared the details in order to sabotage Ellison who has agreed to testify at Bankman-Fried's upcoming trial in October that she entered into an arrangement with the Founder to defraud customers and investors as well as Alameda Research's lenders.

“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defence through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone,” Williams argued.

Additionally, the District Attorney contended that Bankman-Fried with the move attempted to interfere with a fair trial by an impartial jury. He also sought to publicly discredit a government witness.

As a result, DoJ asked the court to issue an order that limits extrajudicial statements by parties and witnesses likely to interfere with a fair trial by an impartial jury. The enforcement agency added that the alleged leakage by Bankman-Fried "could have a chilling effect on witnesses.”

Bankman-Fried Fails to Successfully Dismiss Charges

The new allegation is the latest development in the federal prosecution of the FTX’s Founder following his arrest in the Bahamas last year and subsequent extradition to the United States. Federal prosecutors in the US initially brought eight counts of charges against the disgraced crypto entrepreneur but later expanded them to 13, Finance Magnates reported.

Some of the charges include conspiracy to commit commodities and securities fraud, violation of US money laundering and federal campaign finance laws, and conspiracy to contravene the anti-bribery provisions of the Foreign Corrupt Practices Act.

Reacting, Bankman-Fried’s lawyers took up the matter at the Bahamas Supreme Court, seeking dismissal of the extra charges. This is even as Bankman-Fried previously pleaded not guilty to all charges.

Recently, the former crypto billionaire's legal counsel filed pre-trial motions in the United States, requesting that the court dismiss 10 of the 13 charges filed by federal prosecutors. However, Judge Kaplan struck out all the motions.

Meanwhile, Finance Magnates reported on Friday that FTX has initiated legal action against Bankman-Fried, Ellision, Wang, and Nishad Singh, the company's former Engineering Director, in an attempt to recover a total of 1 billion USD. The amount is part of a larger sum of money allegedly misappropriated by the executives before the company folded.