FTX founder keeps talking, ignoring typical legal strategy

NEW YORK (AP) — For federal prosecutors, Sam Bankman-Fried could be the gift that keeps on giving.

After the November collapse of FTX, the cryptocurrency exchange he founded in 2019, Bankman-Fried unexpectedly gave a series of interviews intended to present his version of events. He was indicted in December and charged with perpetrating one of the biggest frauds in U.S. history — and he’s still talking, either in person or on the internet.

The atypical chattiness for a criminal defendant is likely causing Bankman-Fried’s attorneys to scratch their heads, or worse. Prosecutors can use any statements, tweets or other communications against him at his trial, which is scheduled for October.

“Prosecutors love when defendants shoot their mouths off,” said Daniel R. Alonso, a former federal prosecutor who is now a white-collar criminal defense attorney. If Bankman-Fried’s public comments before trial can be proven false during the trial, it may undermine his credibility with a jury, he said.

Bankman-Fried’s most immediate concern, however, is a recent private communication. Prosecutors say he sent an encrypted message over the Signal texting app on Jan. 15 to the general counsel of FTX US, a likely witness for the government. Bankman-Fried will be back in a New York court Thursday, where a judge could impose new bail restrictions because of what could be seen as an attempt to influence a witness.

Before its collapse, FTX was the world’s second-largest crypto exchange and Bankman-Fried, 30, was its CEO and a billionaire several times over, at least on paper. Celebrities and politicians alike vouched for FTX and its founder, and Bankman-Fried was considered a leading figure in the crypto world.

However, the broad collapse of cryptocurrencies last year caused severe financial...