NEW YORK, Jan 28 (Reuters) – Lawyers for Sam Bankman-Fried on Saturday urged a U.S. judge not to bar the FTX cryptocurrency executive from contacting former colleagues as part of his bail, saying prosecutors had “sandbagged” their bail process. Client “Worst possible light.”
Lawyers were responding Friday night request Bankman-Fried will not be allowed to speak to FTX or most of his Alameda Research hedge fund employees without lawyers present, or use the encrypted messaging apps Signal or Slack, and potential messages will be automatically deleted, according to federal prosecutors.
Bankman-Fried, 30, has been free on $250 million bond since pleading guilty not guilty Accused of defrauding billions of dollars from now-bankrupt FTX.
Prosecutors said their request was in response to Bankman-Fried’s recent efforts to contact a potential witness against him, an FTX-approved general counsel, and was necessary to prevent witness tampering and other obstruction of justice.
But in a letter to U.S. District Judge Louise Kaplan in Manhattan, Bankman-Fried’s lawyers said prosecutors last week raised “overbroad” bail conditions without disclosing whether the two sides were negotiating bail.
Bankman-Fried’s attorneys wrote, “Rather than wait for a response from the defense, the government sandboxed the process by filing this letter at 6:00 p.m. on Friday evening.” “The government clearly believes that a one-sided presentation – to cast our client in the worst possible light – is the best way to get the result it wants.”
Bankman-Fried’s lawyers also said efforts to contact their client’s general counsel and John Ray, who had been installed as FTX’s chief executive during the bankruptcy, were efforts to “help” not intervene.
A spokeswoman for U.S. Attorney Damian Williams in Manhattan declined to comment.
Bankman-Fried’s lawyers suggested that their client have access to some colleagues, including her therapist, but would not be allowed to speak with Carolyn Ellison and Zixiao “Gary” Wang, who have pleaded guilty and are cooperating with prosecutors.
They said the signal ban was not necessary because Bankman-Fried was not using the auto-delete feature, and worried that he might be “unrepentant”.
Lawyers also asked Bankmann-Fried to remove a bail condition barring him from accessing FTX, Alameda or cryptocurrency assets, saying there was “no evidence” that he was responsible for the previously alleged unauthorized transactions.
In an order Saturday, Kaplan gave prosecutors until Monday to address Bankman-Fried’s concerns.
“The court expects all counsel to refrain from defamatory characterization of the actions and motives of their adversaries,” the judge added.
Reporting by Jonathan Stempel in New York; Editing by Andrea Ricci
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