We do the research, you get the alpha!
The New York Times pushed back on Thursday against restrictions in FTX founder Sam Bankman-Fried’s criminal trial that would limit participants’ ability to speak to the press.
In a letter addressed to U.S. District Court Judge Lewis Kaplan, the newspaper advocated for the public’s right to know about a scandal that’s “stripped billions of dollars from the economy and harmed innumerable members of the public.”
The newspaper cited the First Amendment and how it protects news organizations’ right to receive information. It also leaned on criminal rules that say restraints on non-lawyers ability to speak to the press are justified only in limited circumstances.
Once a leading crypto exchange, FTX collapsed last November in a way that raised serious questions about how customer funds were handled. Bankman-Fried was arrested shortly thereafter and faces a litany of charges—civil and criminal—for his role in the exchange’s collapse, including fraud and money laundering.
The Gray Lady’s message follows a report from the newspaper that landed Bankman-Fried back in court. A review of Bankman-Fried’s bail conditions was ordered after snippets of former Alameda Research CEO Caroline Ellison’s personal writings were included in an article published by the Times.
The in-depth look at Ellison’s final days at Alameda detailed how she didn’t feel “well suited” for the job. It also included her admitting she struggled with leadership. Federal prosecutors accused Bankman-Fried of witness tampering by sharing Ellison’s writing with the press.
Federal prosecutors claimed Bankman-Fried should be put in jail ahead of his October trial, only for his counsel to shoot back later with claims the basis for revoking Bankman-Fried’s bail is extremely thin.
Federal prosecutor Danielle Sassoon emphasized during the hearing that Bankman-Fried has had over 1,000 calls with journalists.
At the hearing’s conclusion, Judge Kaplan imposed an interim gag order preventing Bankman-Fried from making public comments. The Times said on Thursday that limiting trial participants’ statements to only those where they defend themselves does not align with established standards.
Ellison, a member of Bankman-Fried’s inner circle and one-time lover, is set to testify against the disgraced crypto wunderkind at his trial. She pleaded guilty to crimes in connection with FTX’s crimes last year.
The Times noted that regulators and law enforcement were not aware of FTX’s alleged mismanagement “until the public’s money had disappeared,” and as a result, there’s an overwhelming amount of public interest in Bankman-Fried and his inner circle.
“The Government argues that the article was part of Defendant’s effort to interfere with the trial,” it said. “That overlooks the public’s legitimate interest—independent of this prosecution—in Ms. Ellison and her activities at her cryptocurrency trading firm.”