April 19, 2024

Bail for Sam Bankman-Fried of FTX was revoked last month on charges that he had tampered with witnesses.

A US federal appeals court on Tuesday appeared sceptical of former cryptocurrency billionaire Sam Bankman-Fried’s argument that being jailed just two months before his trial on federal fraud charges is violating his right to free speech.

US District Judge Lewis Kaplan revoked Bankman-Fried’s $250m bail on August 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 and romantic partner, with a New York Times reporter.

Ellison has pleaded guilty to fraud and is expected to testify against Bankman-Fried.

A three-judge panel of the 2nd US Circuit Court of Appeals in Manhattan challenged Bankman-Fried lawyer Mark Cohen’s assertion that Kaplan had not sufficiently considered the defendant’s right under the US Constitution’s First Amendment to speak with the press and try to restore his reputation.

“There isn’t a First Amendment right to try to discredit or influence a witness who might testify against you, is there?” US Circuit Judge Denny Chin said.

The judges did not say when they would rule on Bankman-Fried’s bid to be released from Brooklyn’s Metropolitan Detention Center.

Bankman-Fried faces seven charges of fraud and conspiracy stemming from the November 2022 collapse of FTX, the now-bankrupt crypto exchange he founded. Prosecutors accused him of looting billions of dollars in FTX customer funds to plug losses at Alameda, buy luxury real estate and donate to US political campaigns. He has pleaded not guilty, while acknowledging risk management failures.

The judges appeared slightly more open to Bankman-Fried’s argument that jailing him violates his right under the Constitution’s Sixth Amendment to aid in his own defence because his case is complicated and he lacked internet access in jail to review prosecutors’ evidence.

They questioned Danielle Sassoon, a prosecutor, about what Cohen said were inadequacies in accommodations Kaplan and the MDC had made to try to allow Bankman-Fried to access the internet, including by visiting his lawyers in a cell at the federal courthouse in Manhattan twice a week.

Sassoon said the government had taken “extraordinary measures” to try to help Bankman-Fried prepare for trial from behind bars, and that Bankman-Fried had seven months with unrestricted internet access while free on $250m bail at his parents’ Palo Alto, California, home.

US Circuit Judge William Nardini said Bankman-Fried should have considered the possibility of losing internet access before sharing Ellison’s writings.

“If it is true that he has intimidated witnesses, at a certain point, he makes his own bed, he sleeps in it,” Nardini said.

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.

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