Jul 27, 2023

The U.S. Department of Justice (DOJ) wants FTX founder Sam Bankman-Fried to spend the remainder of his time before his criminal trial in jail, alleging he has tried multiple times to tamper with witnesses.

Video transcript

Us. Prosecutors want FTX founder Sam Bank been freed to spend the remainder of his time in jail ahead of his criminal trial. Joining us now to discuss is Coindesk global policy and regulation. Managing editor Nick Day, who's also the editor of coin desks state of crypto newsletter. Good morning, Nick. Good morning. How are you doing this morning? I'm good. I am uh certainly in, I think better shape than Mr Baman Fried. I think we all are. So the Department of Justice is alleging that he's tried multiple times to tamper with witnesses. Talk to me about what the DOJ is saying here and what they want to happen. Yeah. So yesterday there was a hearing in the courthouse in Manhattan where the DOJ opened up and said we want to, we were seeking detention for Sam Bakeman Fried. So the DOJ alleged last week that he shared uh Carolyn Elson, the former Alameda research CEO and uh one time romantic partner of Bank Fried uh with the New York Times. Um basically in an effort, effort to discredit her as a witness or a possible witness in court. Uh when his criminal trial starts in October the DOJ says this isn't the first time they pointed to the fact that be Reed had previously reached out to Ryan Miller, the former FTX US General Counsel uh in what the DOJ says was also an effort to try and basically influence his testimony, something the judge agreed with. Um And now they want to, you know, put Roman into jail for the remainder of the time prior to his uh trial's beginning. they're saying there's no set of release conditions that they believe would protect the public interest or general public. And so, yeah, that's where they're at. How are Bank Fried's lawyers responding to this? Well, they're obviously disputing the characterization of the letter. They say that, you know, be M Fried wasn't trying to discredit a witness or, you know, influence testimony. But, you know, their position is that there have been uh you know, quote over a million negative articles about Bank MRI and uh literally thousands of, you know, about uh him. And so their view or their position is that be MRI has a first amendment right to, you know, make a fair comment to basically, you know, defend himself and uh try and, you know, clean up his reputation. Um So they're saying that they would agree to and what they expected was, you know, a kind of a blanket gag order preventing anyone in the case from speaking to the media or uh you know, making other public comments. But they think that the tension is a going too far. And b uh they say it would make it more difficult to organize Reed's defense because so many documents are only accessible through online tools and uh online, you know, uh systems. So what could happen next year if, if he is restricted from communicating publicly? So to be clear, the judge did order an interim gag order, basically preventing any kind of public comment. But kind of, you know, a more, I think serious thing for Bank M Frieden's team. The judge has given the prosecution until tomorrow to basically lay out a case for why they believe he should be remanded into custody. Uh, the defense has until Tuesday to respond and then the prosecution can make one more, you know, written submission, uh by the end of next Thursday saying, ok, you know, here's what our response is to the defense response. So it sure seems like we are headed to a position where the judge is either gonna order another hearing or otherwise, you know, review just the written submissions and say, ok, well, either a Mr Rare is gonna have to spend the remainder of the time before trial in prison or B I, you know, he might decide, ok, well, the gag order is sufficient and XYZ, but it is worth noting he did end yesterday's hearing by, you know, quite directly speaking to beg Madrid warning him to quote, take the matter seriously. Nick. I think we should just change the name of this segment to Sam Baman Fried Watch. We could have some kind of sensational intro. Uh It would be very suiting. The last uh question I have for you here is about this campaign finance charge that was dropped by the DOJ. Why did we see that dropped? Yeah. So this actually we're gonna get a little bit into like the procedural stuff here. So the so of course, you know, bank freed was arrested in the Bahamas last year and extradited to the US as part of that. The Bahamas had a document with the list of proposed charges and they had to functionally agree to those charges before extradition. Now, Ben and Fried had previously argued that, you know, certain charges that the Doj brought in superseding indictments, meaning they brought them after his extradition and arrest in the US uh that, you know, they shouldn't be tried on those charges because the Bahamas had not agreed to them. And the judge at the time said, ok, we'll schedule a separate trial for March 2024 and give the Bahamas a chance to weigh in on these additional charges and, you know, basically sort out all of the extradition treaty issues last night. The US Department of Justice said that they had consulted with the Bahamas and found that the campaign finance charge, which they originally said was part of the first eight charges that they had extradited him on was not actually part of the extradition document that the Bahamas had. And so they need the Bahamas permission basically to charge him on that. Um The implication is that, you know, this campaign finance charge may come up in the March 2024 trial. Now, instead of the October 2023 trial, they didn't say that, but based on how they treated the other charges that they, you know, severed and moved into March 2024 that does kind of seem to be, you know, the I would say the implicit understanding a lot of people would have as to how that might be treated. But of course, we're still waiting on the DOJ to confirm that one way or another. All right, Nick, thanks for joining us this morning and laying out the details there.

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