NEW YORK A U.S. appeals court on Thursday upheld a judge's decision to jail former cryptocurrency billionaire Sam Bankman-Fried ahead of his Oct. 3 trial on fraud charges stemming from the November 2022 collapse of his now-bankrupt FTX exchange.
The decision was issued by the 2nd U.S. Circuit Court of Appeals in Manhattan.
U.S. District Judge Lewis Kaplan had revoked Bankman-Fried's $250 million bail on Aug. 11, finding probable cause to believe that the defendant had tampered with witnesses.
This included his sharing the personal writings of Caroline Ellison, the former chief executive of his Alameda Research hedge fund, with a New York Times reporter.
Ellison has pleaded guilty to fraud and is expected to testify against Bankman-Fried, a former romantic partner. In her writings, she described feeling "unhappy and overwhelmed" with her job and "hurt/rejected" from a breakup with Bankman-Fried.
A lawyer for Bankman-Fried told the appeals court on Sept. 19 that Kaplan failed to credit the defendant for exercising his First Amendment constitutional right to speak with the press and try to restore his reputation.
The appeals court appeared skeptical. One judge said the First Amendment did not protect witness tampering, while another said publicly humiliating someone by releasing personal details could be viewed as an attempt to influence their testimony.
But the judges appeared slightly more open to Bankman-Fried's argument that a lack of internet access at Brooklyn's Metropolitan Detention Center was impeding his preparation for trial in the complicated case.
Danielle Sassoon, a prosecutor, said her office had taken "extraordinary measures" to help Bankman-Fried prepare for trial, and that before being locked up he spent seven months with internet access at his parents' home in Palo Alto, California.
"If it is true that he has intimidated witnesses, at a certain point, he makes his own bed, he sleeps in it," Circuit Judge William Nardini said.
Bankman-Fried faces seven charges of fraud and conspiracy stemming from the collapse of FTX, the now-bankrupt crypto exchange he founded.
Prosecutors accused him of looting billions of dollars in FTX customer funds to plug losses at Alameda, buy luxury real estate and donate to U.S. political campaigns.
Bankman-Fried has pleaded not guilty, while acknowledging risk management failures.
(Reporting by Luc Cohen in New York)
