The Justice Department said the SBF was attempting to discredit Ellison, who had already pleaded guilty to the charges and indicated his willingness to cooperate in the investigation.
Disgraced FTX founder Sam Bankman Fried has been charged by the US Department of Justice (DoJ) with leaking former colleague Caroline Ellison’s memoirs to The New York Times.
Yesterday, The New York Times released an article that delves into the personal writings of Ellison, whom they are referring to as an important witness in the upcoming trial of Bankman Fried. Prior to the fall of FTX, Ellison was in charge of Alameda Research, a sister business, and had a romantic relationship with Bankman-Fried on various occasions. A month after the collapse of FTX, Ellison pleaded guilty to the federal charges in December 2022.
Later yesterday, the Department of Justice submitted its file note:
The defendant’s intent in sharing this material is clear. Ellison pleaded guilty to a co-operation agreement and is expected to testify at trial that she and the defendant agreed to defraud FTX clients, investors, and Alameda lenders.”
And she continued:
“By selectively sharing some private documents with the New York Times, the defendant attempts to discredit a witness, cast Ellison in a bad light, and strengthen his defense through the press and outside the constraints of the courtroom and the rules of evidence: that Ellison was a jilted lover who committed these crimes alone.”
The DOJ also formally asked Judge Louis A. Kaplan enforced an order restricting extrajudicial statements from both parties and witnesses, with the goal of ensuring a fair trial by an impartial jury.
The Department of Justice highlighted that deliberate leaks intended to discredit witnesses not only risk harming the jury group but may also prevent other witnesses from coming forward to testify.
FTX sues SBF and allies
In another development, cryptocurrency trading platform FTX has sued Sam Bankman-Fried and his close allies to recover $1 billion in questionable transactions. The latest lawsuit is part of FTX’s efforts to revive the exchange, under the leadership of new CEO John Ray.
The lawsuit targets Bankman-Fried, Gary Wang (FTX co-founder and former CTO), Nishad Singh (former director of engineering), and Caroline Ellison (co-CEO of Alameda Research LLC, a significant unit of FTX). Each of them is accused of making dishonest transfers that benefited them personally but did not benefit FTX.
For example, the complaint alleges that Bankman-Fried and Wang obtained $546 million from Alameda in May 2022 to purchase shares of Robinhood Markets Inc. They provided Alameda with fake loans that required no collateral and had lower interest rates than the market offered. According to the lawsuit, the only person who authorized these loans to Alameda was Ellison.
Moreover, Bankman-Fried, Wang and Singh are also facing charges of using fake loans to acquire FTX shares worth $250 million at that time.
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Bhushan is a financial technology enthusiast with a good knack for understanding financial markets. His interest in economics and finance has turned his attention towards the new emerging Blockchain technology and Cryptocurrency markets. He is persistent in the learning process and keeps himself motivated by sharing the knowledge gained. In his spare time he reads fantasy and thriller novels and occasionally explores his culinary skills.
