By Jonathan Stempel
NEW YORK (Reuters) – Lawyers for Sam Bankman-Fried urged a U.S. judge on Saturday not to bar the accused FTX cryptocurrency executive from communicating with former colleagues as part of his bail, saying prosecutors were “sandbagging” to implicate their client. “the worst possible light”.
The attorneys were responding to a request by federal prosecutors Friday night to bar Bankman-Fried from speaking to most employees of FTX or his Alameda Research hedge fund without lawyers present, or using the encrypted messaging apps Signal or Slack and potentially deleting messages automatically. .
Bankman-Fried, 30, has been free on $250 million bond since pleading not guilty to fraud charges in the theft of billions of dollars from the now-bankrupt FTX.
Prosecutors said their plea was in response to Bankman-Fried’s recent efforts to contact a potential witness against him, the general counsel for the FTX branch, and was necessary to prevent witness tampering and other obstruction of justice.
But in a letter to U.S. District Judge Lewis Kaplan in Manhattan, attorneys for Bankman-Fried said prosecutors set bail conditions “too broad” without disclosing that the two sides had discussed bail in the past week.
“Instead of waiting for a response from the defense, the government sandboxed the process by sending this letter at 6:00 p.m. Friday evening,” Bankman-Fried’s attorneys wrote. “The government appears to believe that a one-sided submission designed to cast our client in the worst possible light is the best way to get the result it is seeking.”
Bankman-Fried’s attorneys also said their client’s efforts to contact the general counsel and John Ray, who was FTX’s CEO during the bankruptcy, were attempts to offer “assistance” and not to interfere.
A spokesman for US Attorney Damian Williams in Manhattan declined to comment.
Bankman-Fried’s attorneys have suggested that their client have access to some colleagues, including her therapist, but not to speak with Caroline Ellison and Zixiao “Gary” Wang, who have pleaded guilty and are cooperating with prosecutors.
They said Signal’s ban was not necessary because Bankman-Fried did not use the auto-delete feature and its concern was “unfounded.”
The attorneys also asked to lift a bail condition that prevents Bankman-Fried from accessing FTX, Alameda or cryptocurrency assets, saying there is “no evidence” that he was responsible for the earlier alleged unauthorized transactions.
In Saturday’s order, Kaplan gave prosecutors until Monday to address Bankman-Fried’s concerns.
“The court expects all defense counsel to refrain from derogatory characterizations of the actions and motives of their adversaries,” the judge added.
(Reporting by Jonathan Stempel in New York; Editing by Andrea Ricci)