Sam Bankman-Fried's lawyers can question Department of Justice witnesses about their recreational drug use during the FTX founder's fraud trial next month, a judge ruled Tuesday.

Judge Lewis Kaplan, of the Southern District of New York, resolved the majority of outstanding in limine, or pretrial, motions in a 16-page order Tuesday, allowing the DOJ to admit certain evidence. He also denied the DOJ's motions to block the defense team from cross-examining witnesses about privileged issues, and denied Bankman-Fried's team's motion to block any evidence tied to the cryptocurrency exchange's bankruptcy.

He denied the DOJ's motion to block the defense team from "cross-examining witnesses about their recreational drug use," though he added that the defense team "shall not introduce the subject in the presence of the jury absent prior notice to the Court and the government."

He did allow the DOJ to bring forward evidence that suggests Bankman-Fried not only created the FTT token, but directed Alameda to hold a large amount of it and supported market manipulation of the token.

"The alleged manipulation of the cryptocurrency tokens, which resulted in an alleged manipulation of Alameda’s balance sheet, was an act 'done in furtherance of the alleged conspiracy' and therefore is considered 'part of the very act charged,'" he wrote. "Moreover, defendant’s alleged directive to [former Alameda Research CEO Caroline] Ellison to manipulate the price of FTT is direct evidence of their 'relationship of mutual trust.' The probative value of this evidence outweighs any risk of unfair prejudice. It is admissible."

The judge added that certain issues which may sway the jury could be addressed with a jury instruction, which he "would entertain if requested."

He declined to rule on the defense's motion to introduce evidence that Bankman-Fried's use of autodeletion policies on messaging apps was at the direction of the FTX founder's former lawyers, and denied without prejudice a DOJ motion to admit certain out-of-court statements from witnesses. The DOJ can try to bring those statements up, but the judge needs to know the specifics of what those statements are about, he wrote.

The trial is set to begin on Oct. 3.

Sam Bankman-Fried SBF Trial FTX Collapse top news

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. When he's not reporting on digital assets and policy, he can be found admiring Amtrak or building LEGO trains. He owns < $50 in BTC and < $20 in ETH. He was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.