US DOJ Goes After FTX’s Bankman-Fried For Allegedly Leaking Caroline Ellison’s Diary

StevieRay Hansen

3 years ago

The United States Department of Justice (DOJ) has accused Sam Bankman-Fried, the former CEO of the now-collapsed crypto exchange FTX, of leaking the private diary of Caroline Ellison, a former colleague, and CEO of sister trading firm Alameda Research.

The leaked diary was published by the New York Times, shedding light on Ellison’s personal musings and her role as a key witness in Bankman-Fried’s upcoming trial. Ellison had previously pleaded guilty to federal charges related to the alleged fraud at FTX and agreed to cooperate, shortly after the exchange’s collapse.

The DOJ contends that Bankman-Fried’s intention behind this leak was to discredit Ellison and undermine her credibility as a witness, given her cooperation agreement with the prosecution.

DOJ Seeks Order To Limit Extrajudicial Statements

In response to the leak and its potential impact on the trial, the DOJ has filed a request with Judge Lewis A. Kaplan to enforce an order restricting extrajudicial statements made by parties and witnesses involved in the case.

The DOJ argues that such leaks not only have the potential to taint the jury pool but also create an environment of harassment that could deter other potential trial witnesses from testifying. By limiting extrajudicial statements, the DOJ aims to ensure a fair trial by an impartial jury and protect the due administration of justice.

FTT token struggles to hold $1.37 | Source: FTTUSD on TradingView.com

FTX Sues Bankman-Fried And Other Executives For Over $1 Billion

In other news, FTX has filed a lawsuit in a bid to recover more than $1 billion, which the company alleges was misappropriated by Sam Bankman-Fried and former executives prior to the exchange’s demise. FTX Trading accuses the defendants of breaching their fiduciary duties and misappropriating substantial sums belonging to the company for personal gains.

According to the complaint filed by FTX Trading, the defendants, including Bankman-Fried, misused funds to finance luxury condominiums, political contributions, speculative investments, and other personal ventures. FTX Trading also alleges that Bankman-Fried funded his defense through a $10 million gift to his father in January 2022.

The transfer was purportedly initiated from an FTX US account containing the company’s assets, which were later moved to Bankman-Fried’s personal account on the exchange. Interestingly, all the named executives, except for Bankman-Fried, have pleaded guilty to criminal charges brought against them by the U.S. government.

The outcome of both the DOJ’s case and FTX Trading’s lawsuit will likely have significant implications for the individuals involved and the crypto industry as a whole.

The trial of Sam Bankman-Fried is currently scheduled for October 2, and he faces over 100 years in prison if convicted on the various charges brought against him by US authorities.

Featured image from BBC, chart from Tradingview.com

Sources: bitcoinist

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