No jail but court slaps gag order on FTX founder Sam Bankman-Fried

US District Judge, Lewis Kaplan, has imposed stricter bail conditions on Sam Bankman-Fried, the founder of FTX cryptocurrency exchange, following allegations of witness tampering.

The judge restricted Bankman-Fried's ability to communicate publicly and warned that he may face detention before his trial for the collapse of his cryptocurrency exchange.

During a hearing at the Manhattan federal court, prosecutors urged Judge Kaplan to detain Bankman-Fried immediately, claiming that he had "crossed a line" by sharing personal writings of his former romantic partner, Caroline Ellison, with a reporter. This act was considered a second instance of witness tampering, according to the prosecution.

As a response to the concerns raised by prosecutors, Kaplan granted a "gag order" previously requested by the prosecution for the 31-year-old cryptocurrency entrepreneur. Both parties were given until August 3 to present their arguments on whether or not Bankman-Fried should be jailed before his trial.

"I'm very mindful of the government's interest in this issue, which I take seriously," Judge Kaplan asserted. "Mr. Bankman-Fried, you'd better take it seriously too."

Bankman-Fried, represented by his lawyer Mark Cohen, argued that his communications with journalists were an attempt to protect his reputation. Cohen claimed that preparing for the upcoming trial, scheduled for October 2, would become "almost impossible" if Bankman-Fried were to be detained.

Since his extradition from the Bahamas in December, where he was arrested and where FTX was based, Bankman-Fried has been largely confined to his parents' residence in Palo Alto, California.

The former billionaire has pleaded not guilty to charges of embezzling billions of dollars from FTX customer funds, allegedly to cover losses at his crypto hedge fund, Alameda Research. Prosecutors highlighted that Bankman-Fried had engaged in more than 1,000 phone calls with journalists.