Sam Bankman-Fried, the indicted founder of bankrupt FTX, is facing the possibility of a jail term as he prepares for his October fraud trial. In a bid to avoid imprisonment, Bankman-Fried presented arguments to a US District Judge in Manhattan on Tuesday.
One of the key issues raised in court was his contact with a New York Times reporter, where he handed over writings from his former romantic partner, Caroline Ellison, who is expected to testify against him in the trial. Bankman-Fried’s lawyer stated that his intentions were mischaracterized by prosecutors and clarified that it was not an attempt to intimidate Ellison or taint the jury pool.
According to the defence, Sam Bankman-Fried only exercised his rights of making “fair comment on an article already in progress.” The 31-year-old founder has pleaded not guilty to allegations of stealing billions of dollars in FTX customer funds, which he supposedly used to compensate losses at his hedge fund, Alameda Research, where Ellison served as the chief executive.
Since his arrest in December 2022, Bankman-Fried has been largely confined to his parents’ Palo Alto, California home on a $250 million bond. Ellison, along with three former members of Bankman’s inner circle, has pleaded guilty to fraud charges and agreed to cooperate with the US Attorney’s office in Manhattan.
Bankman-Fried was barred from speaking about the case during the trial, and both sides have submitted written arguments about possible jail time. In his defense, Laurence Tribe, a Harvard University constitutional law professor, argued that Bankman-Fried has the right to avoid projecting a false image of guilt by shunning the media.
Another argument against imprisonment raised by Bankman-Fried is the restricted internet access at the Metropolitan Detention Center in Brooklyn, where he would be held, making it difficult for him to adequately prepare for his trial.
The prosecution is expected to respond to Bankman-Fried’s letter by Thursday as the court determines whether he will face jail time ahead of his fraud trial.