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FTX Founder Denies Alleged Witness Tampering in High-Profile Fraud Case

FTX's Sam Bankman-Fried has countered witness tampering accusations in a high-profile fraud case while complying with a court-imposed gag order.

Sam Bankman-Fried
Sam Bankman-Fried

Bankman-Fried's Lawyers Refute Tampering Accusations

Bankman-Fried's legal team, in a letter submitted to the court, dismissed allegations from prosecutors stating that his interaction with a New York Times journalist constituted witness tampering. However, they have accepted the imposition of a gag order restricting public statements which could potentially influence the ongoing criminal fraud case.

Court Set to Consider Gag Order on All Parties Involved

This came after prosecutors attempted to restrict Bankman-Fried and his associates from making public remarks which could interfere with the trial's impartiality. The defense has requested that this order should also encompass prosecutors and key witnesses, notably the CEO of FTX, John Ray. U.S. District Judge Lewis Kaplan is scheduled to review this request in a Wednesday hearing at the federal court in Manhattan.

Background on FTX's Bankruptcy and Fraud Allegations

FTX, a cryptocurrency exchange previously estimated at a $32 billion valuation, declared bankruptcy in November. The founder, Bankman-Fried, stands accused of pilfering customer funds, to which he has pleaded not guilty. His trial is set to commence on Oct. 2.

Bankman-Fried's Interaction with NYT Reporter and Former Colleague

Bankman-Fried's attorney, Mark Cohen, verified that his client had communicated with a New York Times reporter, handing over documents from a former co-worker, Caroline Ellison, who is now cooperating with prosecutors. A July 20 Times article disclosed excerpts from Ellison's personal Google documents predating FTX's downfall. These documents reveal her feelings of frustration and sadness due to her work and her broken relationship with Bankman-Fried.

The Implications of Former Relationship with Guilty Party

Caroline Ellison, who formerly managed Bankman-Fried's Alameda Research hedge fund, has admitted to defrauding investors. Bankman-Fried, in December, revealed that he and Ellison had been romantically involved, without providing additional details. Cohen strongly defended his client's actions, stating they did not breach any court orders, bail conditions, or any law or rule.

Current FTX Leader's Allegations Against Bankman-Fried

Cohen further argues that John Ray, the present leader of the bankrupt FTX, has publicly defamed Bankman-Fried. He pointed to Ray's assertion that the "villains" of the FTX case were being prosecuted, and his claim that Bankman-Fried had maintained a "digital con game" through lies.

Awaiting Comments from the Parties Involved

The spokesperson representing FTX's debtors has refrained from commenting on the issue. The U.S. Attorney's office in Manhattan, which is handling the prosecution, has yet to respond to requests for comments.