US DoJ Accuses Sam Bankman-Fried of Leaking Ellison’s Diary to Press
The DoJ said that SBF was trying to discredit Ellison, who has already pleaded guilty of the charges and showed willingness to cooperate in the investigation.
The United States Department of Justice (DoJ) has accused disgraced FTX founder Sam Bankman-Fried of leaking the private diary of former colleague Caroline Ellison to the New York Times.
Yesterday, The New York Times released an article delving into the personal writings of Ellison, whom they refer to as a crucial witness in the upcoming trial of Bankman-Fried. Before the downfall of FTX, Ellison was in charge of Alameda Research, a sister trading firm, and had a romantic relationship with Bankman-Fried on various occasions. A month after FTX’s collapse Ellison pleaded guilty to federal charges in December 2022.
Later yesterday, the DoJ submitted its filing noting:
“The defendant’s purpose in sharing these materials is plain. Ellison has pleaded guilty to a cooperation agreement and is expected to testify at trial that she agreed with the defendant to defraud FTX’s customers and investors, and Alameda’s lenders.”
It further continued:
“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defense through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone.”
Also, the Department of Justice (DOJ) has formally requested Judge Lewis A. Kaplan to implement an order that restricts extrajudicial statements from both parties and witnesses, aiming to safeguard a fair trial conducted by an impartial jury.
The DOJ highlighted that deliberate leaks intended to discredit witnesses not only run the risk of prejudicing the jury pool but may also deter other witnesses from coming forward to testify.
FTX Sues SBF and Allies
In another development, crypto trading platform FTX has sued Sam Bankman-Fried and his close allies to recover $1 billion in questionable transactions. The recent lawsuit is part of the efforts by FTX to revive the exchange, under the leadership of new CEO John Ray.
The lawsuit targets Bankman-Fried, Gary Wang (FTX co-founder and former chief technology officer), Nishad Singh (former director of engineering), and Caroline Ellison (co-chief executive of Alameda Research LLC, a significant FTX unit). All of them face accusations of doing dishonest transfers that personally benefited them but didn’t benefit FTX.
For example, the complaint alleges that Bankman-Fried and Wang took $546 million from Alameda in May 2022 to buy shares in Robinhood Markets Inc. They provided Alameda with fake loans that didn’t require any collateral and had lower interest rates than what the market offered. The only person who authorized these loans for Alameda was Ellison, according to the lawsuit.
Furthermore, Bankman-Fried, Wang, and Singh also face accusations of using fake loans to acquire FTX stock worth $250 million at that time.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
