The Hyperactive SBF Gets Another Bail Revocation Warning

The FTX saga might have been seriously old news but its former CEO Sam Bankman-Fried (SBF) has been making the headlines every now and then.

Delving into the ongoing criminal case against him, a pertinent question looms large: will his $250 million bail be revoked? Startling allegations of intimidation towards Caroline Ellison, his former partner and colleague, have sparked this crucial development.

The proceedings, which unfolded on yesterday in the United States (US) District Court for the Southern District of New York, saw Assistant US Attorney Danielle Sassoon advocating for the bail's revocation. The claim revolves around SBF's alleged misuse of his liberty to intimidate Caroline, further amplified by the revelation of her private online journals by a reporter behind The New York Times story — a matter that the judge finds deeply concerning.

Assistant US Attorney Danielle began the hearing by pointing out that the Department of Justice (DOJ) was seeking SBF’s detention, “It is the government's view that no set of release conditions can secure the safety of the community…it appears to be undisputed the defendant provided the documents quoted [in the New York Times] ... to discredit [Ellison].”

Allegations also suggest he sent over 100 emails and engaged in an equal number of phone calls with a particular Times reporter, the very author of the disputed article. Furthermore, the DOJ suspects that SBF was the source behind a prior article concerning Caroline, adding another layer of complexity to the case.

Amidst these revelations, the prosecution's concern intensifies, spotlighting SBF’s astonishing 500-plus phone calls with none other than Michael Lewis, an author ready to unveil a book on FTX right around the onset of the criminal trial.

One of the individuals on site reported the following extensively (see below).

The Man-Child That is SBF
With the Department of Justice's complaint on last week, accusing SBF of attempting to hinder a fair trial through public discrediting of Caroline, his legal team is now putting forth a compelling argument before Judge Lewis Kaplan. They assert that any gag order should encompass potential witnesses, including the current FTX CEO, John Ray. This move brings Ray's involvement into the spotlight, given his frequent interactions with various media outlets on matters related to the defunct exchange since its bankruptcy filing last November.

So now, the spotlight falls on Judge Lewis, who is set to consider arguments from both the US government on 28 July and SBF's legal team on 3 August. The judge's warning to SBF to "better take it seriously" adds a sense of gravity to the upcoming proceedings. Notably, Judge Lewis has already given his approval to a temporary order, initiated by prosecutors, which significantly restricts SBF from making extrajudicial statements until the bail arguments are settled.

Ever since his arrest and indictment back in last December, the former FTX CEO has made multiple court appearances, each addressing issues related to his bail conditions. His current situation confines him to his parents' residence in California, with additional restrictions on the use of messaging apps, virtual private networks, and specific technologies. Not one to sit still, he went on Twitter (now rebranded to X) with multiple cryptic tweets, sparring head-on Twitter-style with Binance’s Changpeng Zhao (CZ), unwinding with video games, going on a plethora of interviews, and the likes. And just last week, FTX filed a lawsuit against several prominent figures, including its former CEO and other key executives from the now-defunct crypto exchange. The suit seeks to reclaim an impressive sum exceeding $1 billion in funds that the company alleges were misappropriated.

The Argument Put Forth
Judge Lewis' scepticism became evident as defense attorney Mark Cohen presented his arguments during the hearing. The latter adamantly asserted that SBF had no intention of discrediting Caroline, and while he did not directly contact reporters, he strategically responded to them to shape the media narrative surrounding his client. An astonishing fact emerged — over a million negative articles have been published about SBF, further fuelling the intensity of the case.

In defense of his client's liberty, Mark made a crucial point — remanding SBF to jail would present significant hurdles in organising an effective defense. He highlighted the volume of documents accessible through online tools, underscoring the complexities of managing such vast digital resources, “What we have here is a defendant who believes, given the many, many negative stories ... given the literally thousands of stories about his relationship with Ms. Ellison ... that he had the right to make fair comment.”

However, Assistant US Attorney Danielle offered a counterpoint, stating that relying on these digital tools for discovery was not a "get out of jail" card.

Once Bitten, Twice Shy…Not
At yesterday’s hearing, Judge Lewis raised significant concerns about SBF’s conduct while on bond. This is not the first instance of the judge expressing apprehension. Back in February, during a previous hearing, he made his doubts known, suggesting "probable cause" that SBF’s communications with former FTX.US general counsel Ryne Miller might have crossed into the territory of witness tampering. Even on Wednesday, Judge Lewis stood by his suspicions, believing that the interactions with the general counsel were likely an attempt to influence testimony.

Taking proactive steps, Judge Lewis implemented an interim gag order, prohibiting SBF from communicating with the press or making any public statements. This order will remain in effect until the judge thoroughly reviews the written submissions that will ultimately determine whether the FTX founder's bail should be entirely revoked.

Some Rest for the Weary
US prosecutors just revealed their intention to drop a significant charge against him — one that alleged he conspired to make unlawful campaign contributions. In a letter addressed to Judge Lewis yesterday, US Attorney Damian Williams cited a pivotal development: The Bahamas, where SBF had been located, expressed their unwillingness to extradite him on this particular charge. As a result, prosecutors have chosen not to pursue the charge any further, signaling a shift in the case's trajectory.

SBF had vehemently contested this charge from the outset, contending that it was introduced only after his extradition from The Bahamas, and that it was not part of the original agreement.

SBF Facing Endless Criminal Trials
As the calendar advances, the anticipation builds for SBF’s upcoming criminal trial, scheduled to commence on 2 October. However, a separate trial for him is also likely to begin in March 2024. Throughout this legal process, SBF maintains his plea of not guilty to all charges, keeping everyone on edge as the dates approach.

As the legal drama unfolds, the pursuit of truth and justice hinges on these pivotal arguments. With high stakes and complex dynamics at play, the courtroom becomes an arena of legal prowess, where every move and every statement hold the potential to shape the outcome.