FTX founder Bankman-Fried objects to tighter bail, says prosecutors 'sandbagged' him

By Jonathan Stempel

NEW YORK (Reuters) – Attorneys for Sam Bankman-Fried on Saturday urged a U.S. choose to not ban the indicted FTX cryptocurrency govt from speaking with former colleagues as a part of his bail, saying prosecutors “sandbagged” the method to place their consumer within the “worst attainable gentle.”

The legal professionals have been responding to a Friday evening request by federal prosecutors that Bankman-Fried not be allowed to speak with most staff of FTX or his Alameda Analysis hedge fund with out legal professionals current, or use the encrypted messaging apps Sign or Slack and doubtlessly delete messages robotically.

Bankman-Fried, 30, has been free on $250 million bond since pleading not responsible to costs of fraud within the looting of billions of {dollars} from the now-bankrupt FTX.

Prosecutors stated their request was in response to Bankman-Fried’s latest effort to contact a possible witness towards him, the overall counsel of an FTX affiliate, and was wanted to forestall witness tampering and different obstruction of justice.

However in a letter to U.S. District Decide Lewis Kaplan in Manhattan, Bankman-Fried’s legal professionals stated prosecutors sprung the “overbroad” bail circumstances with out revealing that either side had been discussing bail over the past week.

“Reasonably than look ahead to any response from the protection, the federal government sandbagged the method, submitting this letter at 6:00 p.m. on Friday night,” Bankman-Fried’s legal professionals wrote. “The federal government apparently believes {that a} one-sided presentation – spun to place our consumer within the worst attainable gentle – is one of the simplest ways to get the result it seeks.”

Bankman-Fried’s legal professionals additionally stated their consumer’s efforts to contact the overall counsel and John Ray, put in as FTX’s chief govt through the chapter, have been makes an attempt to supply “help” and to not intrude.

A spokesman for U.S. Legal professional Damian Williams in Manhattan declined to remark.

Bankman-Fried’s legal professionals proposed that their consumer have entry to some colleagues, together with his therapist, however not be allowed to speak with Caroline Ellison and Zixiao “Gary” Wang, who’ve pleaded responsible and are cooperating with prosecutors.

They stated a Sign ban is not obligatory as a result of Bankman-Fried is just not utilizing the auto-delete characteristic, and concern he may is “unfounded.”

The legal professionals additionally requested to take away a bail situation stopping Bankman-Fried from accessing FTX, Alameda or cryptocurrency property, saying there was “no proof” he was accountable for earlier alleged unauthorized transactions.

In an order on Saturday, Kaplan gave prosecutors till Monday to deal with Bankman-Fried’s issues.

“The court docket expects all counsel to abstain from pejorative characterizations of the actions and motives of their adversaries,” the choose added.