FTX's Bankman-Fried appeals jailing as trial nears

FILE PHOTO: Former FTX Chief Executive Bankman-Fried at a courthouse in New York

By Luc Cohen

NEW YORK (Reuters) -Sam Bankman-Fried has appealed a decision to jail him for alleged witness tampering ahead of his Oct. 3 trial over the collapse of his FTX cryptocurrency exchange.

In a filing late on Friday night with the 2nd U.S. Circuit Court of Appeals, Bankman-Fried's lawyers said the 31-year-old former billionaire simply exercised his First Amendment rights by sharing writings by his former colleague and romantic partner Caroline Ellison with a New York Times reporter.

Ellison is one of three former members of Bankman-Fried's inner circle expected to testify against him after pleading guilty to fraud. Bankman-Fried's lawyers said he shared her writings to defend his reputation, not to intimidate her.

"It is unclear how a cooperating witness who has promised to testify against a defendant could be meaningfully threatened by nothing but their own statements being published by a reputable newspaper," Bankman-Fried's lawyers wrote.

In her writings, which predated FTX's November 2022 collapse, Ellison described feeling "unhappy and overwhelmed" with her job and "hurt/rejected" from her breakup with Bankman-Fried.

Prosecutors said Bankman-Fried released those writings to harass Ellison and to dissuade others from testifying if they thought he would make them look bad in the press.

U.S. District Judge Lewis Kaplan in Manhattan revoked Bankman-Fried's bail on Aug. 11, finding probable cause to support a witness tampering charge.

Prosecutors have accused Bankman-Fried of stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, a crypto-focused hedge fund he also owned and where Ellison was chief executive.

He has pleaded not guilty.

In their appeal, Bankman-Fried's lawyers also said their client's lack of computer access at Brooklyn's Metropolitan Detention Center has prevented him from being able to analyze the government's evidence and prepare properly for trial.

Though Bankman-Fried has been allowed to meet with his lawyers twice a week, for six hours at a time, at the Manhattan federal courthouse, his lawyers have said he needs more time, and asked that either he be released temporarily or that they be permitted to meet five days a week.

The defense has also said the Brooklyn jail has failed to provide Bankman-Fried with Adderall for his attention deficit hyperactivity disorder, or serve him vegan food, causing him to subsist on bread, water and peanut butter.

(Reporting by Luc Cohen in New YorkEditing by Daniel Wallis, Nick Zieminski and Matthew Lewis)