FTX founder Bankman-Fried objects to strict bail, prosecutors call him ‘sandbag’

NEW YORK, Jan 28 (Reuters) – Lawyers for Sam Bankman-Fried urged a U.S. judge on Saturday that the accused FTX cryptocurrency executive should not be barred from contacting former colleagues as part of his bail. Customer “in a bad light”

Prosecutors responded to a request by federal prosecutors Friday night that most employees at FTX or his Alameda research hedge fund could not speak without lawyers or use encrypted messaging apps such as Signal or Slack, or potentially automatically delete messages. .

Bankman-Fried, 30, has been freed on $250 million bond after pleading not guilty to fraud charges that stole billions of dollars from the now-bankrupt FTX.

Prosecutors said it was necessary to prevent witness tampering and other obstruction of justice in response to Bankman-Fried’s recent attempt to contact a potential witness against her, the general counsel of an FTX subsidiary.

But in a letter to U.S. District Judge Louis Kaplan in Manhattan, Bankman-Fried’s attorneys said prosecutors imposed “excessive” bail conditions without disclosing that the two sides discussed bail last week.

“Rather than wait for any response from the defense, the government sandbagged the process and filed this letter at 6:00 p.m. on Friday,” Bankman-Fried’s attorneys wrote. “The government clearly believes that a one-sided presentation – to put our client in the worst possible light – is the best way to get the result it’s looking for.”

Bankman-Fried’s attorneys said their client’s efforts to contact John Ray, the general counsel appointed as FTX’s chief executive during the bankruptcy, were attempts to provide “assistance” and did not interfere.

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A spokeswoman for U.S. Attorney Damian Williams in Manhattan declined to comment.

Bankman-Fried’s lawyers proposed that their client have access to some colleagues, including her therapist, but were not allowed to speak with Carolyn Ellison and Zixiao “Gary” Wang, who pleaded guilty and cooperated with prosecutors.

They said that because Bankman-Fried did not use the auto-delete feature, the signal blocking was not necessary and that he could be concerned that he was “unfounded.”

Prosecutors also asked for a bail condition barring Banker-Fried from accessing FTX, Alameda or cryptocurrency assets, saying there was “no evidence” he was responsible for the alleged unauthorized transactions.

In an order Saturday, Kaplan gave attorneys until Monday to address Bankman-Fried’s concerns.

“The court expects all counsel to refrain from discrediting the actions and intentions of their adversaries,” the judge added.

Reporting by Jonathan Stempel in New York; Editing by Andrea Ricci

Our Standards: Thomson Reuters Trust Principles.

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