© Reuters. FILE PHOTO: Indicted FTX founder Sam Bankman-Fried leaves the United States Courthouse in New York City, U.S., July 26, 2023. REUTERS/Amr Alfiky/File Photo
By Luc Cohen
NEW YORK (Reuters) – Lawyers for Sam Bankman-Fried on Tuesday are set to urge a U.S. appeals court to free him from a Brooklyn jail as the former cryptocurrency billionaire races to prepare for his Oct. 3 trial on federal fraud changes.
Bankman-Fried’s lawyers and the Manhattan U.S. Attorney’s office each will be given five minutes to argue to a three-judge panel of the 2nd U.S. Circuit Court of Appeals about whether the 31-year-old FTX cryptocurrency exchange founder should stay behind bars.
U.S. District Judge Lewis Kaplan revoked Bankman-Fried’s $250 million bail on Aug. 11, finding probable cause to believe that the defendant had tampered with witnesses. This included his sharing the personal writings of Caroline Ellison, the former chief executive of his Alameda Research hedge fund, with a New York Times reporter.
Ellison has pleaded guilty to fraud and is expected to testify against Bankman-Fried, a former romantic partner.
Bankman-Fried faces seven charges of fraud and conspiracy stemming from the November 2022 collapse of his now-bankrupt company. Prosecutors accused him of looting billions of dollars in FTX customer funds to plug losses at Alameda, buy luxury real estate and donate to U.S. political campaigns. He has pleaded not guilty, while acknowledging risk management failures.
In his appeal of Kaplan’s decision to keep him locked up, Bankman-Fried said jailing him violated his rights under the U.S. Constitution’s First Amendment to speak with the press and try to restore his shattered reputation, and said it was unclear how Ellison could be threatened by having her own words published.
Bankman-Fried also said jailing him violates his right under the Constitution’s Sixth Amendment to aid in his own defense because his case is complicated and jail officials have not given him “ready access” to his lawyers and to computers to review the voluminous evidence.
Prosecutors countered in court papers that Bankman-Fried sought to use the Times as a “mouthpiece for discrediting a government witness shortly before trial.” They also said Bankman-Fried has had no more difficulty preparing for trial than any other detainee.
Kaplan in a written ruling last week said that Bankman-Fried had not specified which pieces of evidence he had been unable to access and noted that the defendant had not asked for a trial delay despite the judge’s offer to consider one.