Inside the courtroom where SBF almost went to jail

Disgraced FTX founder Sam Bankman-Fried very nearly went to jail yesterday — before his trial even started.

Those were the stakes at the Wednesday hearing in a packed downtown Manhattan courtroom, as a visibly frustrated judge came close to siding with prosecutors who claimed the former FTX founder had "crossed the line" by leaking diary documents from his former employee Caroline Ellison to the New York Times. The only option remaining to protect a fair trial, they claim, is revoking bail to detain him now.

Assistant U.S. attorney Danielle Sassoon opened the hearing by pushing for Bankman-Fried's detention until his trial begins in October, saying SBF “crossed a line toward inappropriately influencing jurors, intimidating that witness and sending a message to other prospective witnesses.”

Bankman-Fried was implicated over the weekend as one of the sources in the New York Times story that published diary excerpts from former Alameda Research CEO Caroline Ellison, who has pled guilty to fraud charges and has become a key witness for the government. SBF's defense attorneys later admitted he was indeed the source who had leaked documents to the Times.

“Having contact with the press alone isn’t witness-tampering,” or good standing to revoke bail, Sassoon admitted. But at some point, "non-violent witness tampering is basis for detention ... and harassing a witness is not responding for comment."

In total, Sassoon claimed SBF sent a total of more than 100 emails and held more than 1,000 calls with journalists — including multiple calls with the New York Times reporter and some lasting more than 20 minutes.

After Sassoon closed her opening remarks, SBF's defense attorney Mark Cohen hit back by noting that bail conditions did not bar SBF from speaking with journalists. He added that while it might not be a good strategy, or a bad strategy, "it is a permitted strategy."

When pressed about the nature of the in-person meeting at his parents' home where Bankman-Fried shared documents with the New York Times, Cohen noted the document in question was only one or two pages. When pressed again by Judge Kaplan about whether the defense would share those documents with the court, SBF whispered with his attorneys for a solid 45 seconds before Cohen agreed to present them.

At the end of the back and forth, Judge Kaplan issued a stern warning to SBF about no longer directly interfering with witnesses or a fair trial, and issued a gag order to avoid more press snafus before he's able to read written arguments to possibly alter SBF's bail conditions.

“I am certainly very mindful of his First Amendment rights, and I am very mindful of the government’s interest here, which I take very seriously,” Judge Kaplan said from his bench. “I say to the defendant, Mr. Bankman-Fried, you better take it seriously, too.”

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