Sam Bankman-Fried may soon go to jail for alleged witness tampering after leaking Caroline Ellison's diary entries

• Prosecutors want to send Sam Bankman-Fried to jail over alleged witness tampering.
• He showed a journalist diary entries by Caroline Ellison, an anticipated witness in his upcoming trial.
• Prosecutors want his home confinement revoked. The judge indicated he'll decide next week.

Prosecutors asked a federal judge Wednesday to send Sam Bankman-Fried to jail after he leaked his ex-girlfriend's private diary entries to the New York Times.

Assistant US Attorney Danielle Sassoon told US District Judge Lewis Kaplan at a court hearing that the leaks — in addition to Bankman-Fried's earlier contacts with the general counsel for FTX — amounted to witness tampering.

"No set of release conditions can ensure the safety of the community," Sassoon said at the hearing in Manhattan federal court.

Following the hearing, Kaplan issued a gag order forbidding Bankman-Fried, as well as his lawyers and representatives, from talking about the case.

Immediately after the hearing, a representative for Bankman-Fried declined to comment, then smiled.

Kaplan said he'll accept additional filings from the prosecutors and defense attornies over the next week before deciding whether to revoke Bankman-Fried's bond conditions that allow him to remain under house arrest before his criminal trial, which is scheduled for October.

Wednesday's hearing followed volleys of sharp letters between prosecutors and defense attorneys over a New York Times story citing diary entries by Caroline Ellison. Ellison previously dated Bankman-Fried, was the CEO of his hedge fund Alameda Research, and pleaded guilty to a scheme where prosecutors say they defrauded investors into FTX, his cryptocurrency fund. She's expected to testify against him at his trial.

The diary entries, kept on Google Docs and written last year, had depicted her weariness and angst working with Bankman-Fried amid their periodic relationship, the New York Times reported earlier this month. 

In those entries, Ellison revealed feeling self-conscious in Bankman-Fried's presence and described her "instinct to shrink and become smaller and quieter and defer to others," according to the New York Times. 

After that report, prosecutors told the judge that it was Bankman-Fried who leaked the entries in order to undermine Ellison as she prepares to testify against him. They asked the judge to issue a gag order against him.

At the hearing on Wednesday, prosecutors went a step further: They said home confinement couldn't keep Bankman-Fried under control and asked the judge to put him in jail.

"With this defendant, where there's a will, there's a way," Sassoon said. "And with this defendant, there is certainly a will."

Bankman-Fried keeps breaking his bail conditions

According to prosecutors, Bankman-Fried defrauded investors of FTX — plus broke a number of other laws — in part by commingling cryptocurrency funds with Alameda Research, the hedge fund he also controlled.

Bankman-Fried pleaded not guilty to the charges against him. The case has produced an enormous volume of discovery material, to the point where the FBI struggled to analyze the data on Bankman-Fried's laptop even with its specialized tools. In court Wednesday, Mark Cohen, Bankman-Fried's lawyer, said the material would fill three skyscrapers if it were all printed out.

When Bankman-Fried was initially extradited from the Bahamas and arrested in December, his attorneys and prosecutors agreed on a $250 million bond that allowed him to live at home with his parents in California rather than remain in jail in New York ahead of his trial. Bankman-Fried would also be able to use his laptop — with restrictions — which would allow him to help his lawyers search and sift through the massive amounts of material while preparing for his trial.

But Bankman-Fried has repeatedly abused these relatively lax conditions, prosecutors said. He used messaging apps that permitted auto-deleting and encrypted texts. He installed a VPN, supposedly to watch football finals and the Super Bowl. 

Prosecutors said the Ellison leaks, plus earlier contact with FTX general counsel amount to witness tampering.

"He provided documents not in the public record that the court did not a deem admissible at trial that, in the government's view, were meant to embarrass Ms. Ellison," Sassoon said Wednesday.

Bankman-Fried's lawyers said his interaction with the journalist was just addressing his overwhelmingly negative press, but prosecutors say it was much more than that. 

Bankman-Fried sent more than 100 emails to journalists and made 1,000 calls to journalists, prosecutors say. He called the New York Times journalist who wrote the story based on the leak 100 times, they said.

Attorney Mark Cohen, who represents Bankman-Fried, said his client showed the journal entries to the Times reporter, but didn't send copies — and it was only 1 or 2 pages.

In their filing this month, prosecutors asked the court to limit what figures involved in the case can say outside of court proceedings, characterizing Bankman-Fried's recent actions as an "attempt to interfere with a fair trial by an impartial jury." 

In response, Bankman-Fried's defense team said they would accept a gag order to rein in what their client could say before the trial, but argued that Bankman-Fried was within his bounds to share Ellison's entries with a journalist. 

Besides, they said, it just made him look bad anyway. 

Ellison pleaded guilty in December to charges including conspiracy to commit money laundering and conspiracy to commit wire fraud, part of a deal to cooperate in the criminal investigation.

Lawyers for Bankman-Fried and Ellison declined to comment.