Bankman-Fried’s Lawyers Call Out Government’s Media Coziness

It hasn’t even started. But the crypto trial of the century has gotten even crazier in recent days after Sam Bankman-Fried was confirmed to have leaked his ex’s diary excerpts to the New York Times.

Caroline Ellison, the former CEO of FTX affiliate Alameda Research, had been writing journal entries in her Google Docs account. But to hear SBF’s lawyers tell it, the outrage is not that their client leaked these supposedly private entries. But that prosecutors, and John Ray III, SBF’s replacement as CEO of FTX, have spoken too freely to the media and smeared SBF.

An Explosive Twist in the Sam Bankman-Fried Saga

Alameda Research was the unofficial sister company of FTX. The investment firm also used FTX customer funds for its investments without the knowledge or consent of customers.

However, to the shock of many, Ellison’s diary entries surfaced in a July 20 story in the New York Times called “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case.”

Observers immediately speculated that the source of the diary entries was Sam Bankman-Fried himself, Ellison’s former colleague and boyfriend.

However, in a court filing submitted Monday, lawyers for SBF have confirmed the leak came from the FTX founder. They have also defended his actions, saying he was only trying to give his side of the story.

“Mr. Bankman-Fried did nothing wrong,” reads the July 24 filing.

Government lawyers have alleged that Bankman-Fried tried to “discredit” Ellison and taint the jury pool. Ellison is expected to be a star witness against her former partner when the trial begins in October.

The letter, addressed to Judge Kaplan, continues:

“A reporter contacted Mr. Bankman-Fried and asked if he wanted to respond to an article about Ms. Ellison that had been in process for months, for which the reporter already had other sources, and which was about to be published. Mr. Bankman-Fried spoke to the reporter and shared certain documents that he had obtained prior to his arrest, and that were not produced in discovery, in an effort to give his side of the story about topics that have already been reported in the media.”

The FTX founder’s lawyers claim he did not violate the protective order, bail conditions, or any laws. Instead, he exercised his First and Sixth Amendment rights to respond to media inquiries, given the negative coverage about him and his case.

They do, however, point to a “hyper-toxic” media environment.

His lawyers have now turned their guns on the government for being too eager to talk with the media. They contrast this willingness with the attitude of their client, who stayed largely silent until he had no choice but to try to counter the negative press.

Specifically, they allege that the government has been the source of numerous media stories throughout the pre-trial period. Including through court filings, press conferences, and disclosures to the press. 

Was SBF Providing Cover for Caroline Ellison?

Prosecutors are not the only target of SBF’s legal team. They are particularly scathing about John Ray III, FTX’s new CEO.

Ray “routinely made disparaging statements in the FTX bankruptcy proceedings… discrediting Mr. Bankman-Fried. Mr. Ray’s repeated ad hominem attacks on Mr. Bankman-Fried—which have very little do with his role recovering assets for FTX creditors … seem more directed towards publicly vilifying Mr. Bankman-Fried,” the lawyers claim.

This behavior, according to Bankman-Fried’s attorneys, left their client with no choice but to respond.

One commentator summarized what many observers thought about Ellison and Bankman-Fried’s strange relationship. “Did you seriously hire an ardent diarist to help run a massive criminal conspiracy?”

However, another online pundit put forward a different theory. That the leaks were designed to make Ellison, who complains of imposter syndrome and of Bankman-Fried’s behavior throughout the diaries, appear more innocent:

“Sam could also be helping frame a narrative to reduce Caroline’s exposure. . . .The diaries rather seem to conveniently build Caroline up to play the Theranos Elizabeth Holmes defense, which is, the man made me do it.”