During the upcoming fraud trial of FTX founder Sam Bankman-Fried (SBF), Judge Lewis Kaplan of the Southern District of New York has ruled that SBF's legal team can question Department of Justice (DOJ) witnesses about their recreational drug use.

This decision came as part of Judge Lewis' resolution of various pretrial motions in a comprehensive 16-page order issued on Tuesday.

In addition to allowing the DOJ to present specific evidence, the judge denied their motions to prevent the defense from cross-examining witnesses on privileged matters.

Conversely, the judge also denied SBF team's request to block any evidence related to the cryptocurrency exchange's bankruptcy.

Regarding the issue of questioning witnesses about their recreational drug use, Judge Lewis ruled in favour of the defense, but with the condition that this topic should not be introduced in the presence of the jury without prior notice to the Court and the government.

Furthermore, he permitted the DOJ to introduce evidence suggesting that SBF not only created the FTT token but also directed Alameda to hold a significant amount of it, potentially supporting allegations of market manipulation.

The judge wrote:

"The alleged manipulation of the cryptocurrency tokens, which resulted in an alleged manipulation of Alameda's balance sheet, was an act 'done in furtherance of the alleged conspiracy' and therefore is considered 'part of the very act charged. Moreover, defendant's alleged directive to [former Alameda Research CEO Caroline] Ellison to manipulate the price of FTT is direct evidence of their 'relationship of mutual trust.' The probative value of this evidence outweighs any risk of unfair prejudice. It is admissible."

Furthermore, Judge Leiws indicated that certain issues that might have an impact on the jury's judgment could potentially be addressed through a jury instruction, expressing his willingness to consider such a request if made.

He opted not to make a ruling on the defense's motion to introduce evidence indicating that SBF's use of autodeletion policies on messaging apps was carried out under the guidance of his former lawyers.

Additionally, he denied, but without prejudice, a DOJ motion aimed at admitting specific out-of-court statements made by witnesses.

However, he emphasised the importance of the DOJ providing details about the content and context of these statements before they can be presented.

The trial is scheduled to commence on 3 October.

Why Is SBF Refilling For Temporary Release Ahead Of Trial?

SBF has once again requested temporary release from custody (not surprising) as he faces trial, according to a letter submitted by his legal team to the presiding judge on Monday.

In their letter, SBF's lawyers noted that the recent court ruling did not preclude the possibility of another release application by the defense.

They emphasised the practical challenges of adequately preparing for the trial, expressing gratitude for the government's efforts in providing case materials and legal counsel.

The defense pointed out the significant volume of evidence, including a list of over 50 potential witnesses, thousands of pages of documents, and more than 1,300 exhibits provided by the government, making it difficult to prepare adequately.

They also highlighted the uncertainty surrounding witness schedules and exhibits, making it challenging to prepare for the next day's proceedings during non-courtroom hours.

The renewed request seeks SBF's release on 2 October, one day before the trial begins, with specific conditions in place.

These conditions include his presence with his attorneys at their offices or an offsite workspace or under the supervision of a security guard at a temporary residence in New York City when not in court.

He will be allowed to leave the courthouse with his legal team for trial preparation.

SBF has agreed to a gag order, limiting his communication to his attorneys, parents, and brother throughout the trial.

Additionally, he will have a private security guard from 10pm onwards to prevent access to electronic devices, including computers, cell phones, the internet, television, or any electronic equipment.

The lawyers stated in the letter:

"We are willing to accept any others (conditions) the Court deems necessary."