SBF Shouldn’t be Detained for Leaking Details From Ellison’s Diary, Lawyers Claim

Cohen & Gresser – an international law firm representing the former CEO of FTX Sam Bankman-Fried (SBF) – maintained that he did not attempt to intimidate Caroline Ellison (ex-leader of Alameda Research) or taint the jury’s sentiment when talking to a New York Times reporter.

The 31-year-old, who faces several fraud charges and is accused of being the main culprit behind the collapse of the once-leading crypto exchange, shared quoted excerpts of Ellison’s private diary, revealing that her psychological condition was shaken prior to the catastrophe. 

The US Department of Justice (DOJ) insisted on SBF’s detention and a bond revocation, maintaining that his actions could have tampered with the woman, who may be summoned as a witness at his trial set for the beginning of October.

The Lawyers’ Response 

Mark Cohen and Christian Everdell – attorneys at Cohen & Gresser – sent a letter to Judge Lewis Kaplan, requesting that their client Bankman-Fried should not be imprisoned for leaking information from Caroline Ellison’s diary.

The lawyers argued that SBF’s contact with the journalist was “a proper exercise of his rights to make fair comment on an article already in progress, for which the reporter already had alternate sources.” They also insisted that the defendant has a right to talk to the press about his case to protect his reputation “as long as the communications are not calculated to pervert the course of justice.”

“The Government’s proffered factual basis to revoke Mr. Bankman-Fried’s bail is extremely thin and relies heavily on assumptions, unsupported inferences, and innuendo. The Government recognizes that, even under its view of the facts, Mr. Bankman-Fried’s contact with the New York Times reporter by itself is not sufficient to justify detaining him,” the letter reads.

Subsequently, Cohen & Gresser claimed that detaining SBF (as requested by the US DOJ) “would make it impossible for him to fully participate in his defense.” The firm reminded that federal prison inmates are not allowed Internet access, which “will cut off Mr. Bankman-Fried from key parts of the discovery entirely and render the rest effectively unreviewable.”

Sharing data from Ellison’s private dairy (SBF’s ex-girlfriend) is just one of the many charges the former crypto tycoon faces. He was accused of orchestrating a massive scam that led to the fall of FTX in November last year.

Ellison, who was in charge of the sister company Alameda Research, pleaded guilty to playing a role in the frauds that contributed to the exchange’s meltdown and the consecutive multi-billion investor losses. She agreed to cooperate with the relevant authorities and is expected to participate as a witness during SBF’s mega trial starting on October 2. 

The Leaked Data

The New York Times coverage (published last month) revealed that Ellison was “unhappy and overwhelmed” with her job months before the crash of FTX. She also told SBF that she had “significantly decreased” her excitement about Alameda Research due to the couple’s breakup. Ellison also questioned her capabilities as the leader of the entity.

The 28-year-old faced a jail sentence of 101 years before agreeing to “cooperate fully” with the US authorities. It remains unclear what her eventual punishment will be, with some experts suggesting she could receive just probation for pleading guilty and testifying in SBF’s trial.