An appeals court in the United States has upheld a decision to revoke former cryptocurrency billionaire Sam Bankman-Fried bail, ensuring he remains in custody pending his trial.
Bankman-Fried is facing fraud charges related to the collapse of his now-bankrupt FTX exchange in November 2022, with his trial scheduled to commence on October 3.
In a written decision, a three-judge panel of the 2nd US Circuit Court of Appeals in Manhattan affirmed the ruling by US District Judge Lewis Kaplan, who concluded that Bankman-Fried had likely attempted to tamper with two witnesses.
This included sharing the personal writings of Caroline Ellison, the former chief executive of his Alameda Research hedge fund, with a New York Times reporter.
Caroline Ellison, who was previously romantically involved with Bankman-Fried, has pleaded guilty to fraud and is expected to testify against him.
In her writings, she expressed feelings of unhappiness and being overwhelmed with her job, as well as feelings of hurt and rejection following the end of her relationship with Bankman-Fried.
Judge Kaplan had revoked Bankman-Fried’s $250 million bail on August 11.
The appeals court judges rejected Bankman-Fried’s argument that Kaplan failed to recognize his exercise of the First Amendment right to speak with the press and attempt to restore his reputation.
The judges emphasized that Kaplan correctly determined that speech used to commit a criminal offense, such as witness tampering, falls outside the scope of constitutional protection.
Bankman-Fried is facing seven charges of fraud and conspiracy linked to the collapse of FTX, the cryptocurrency exchange he founded, which is now bankrupt.
Also Read: FTX Founder Sam Bankman-Fried Denied Pretrial Release In Cryptocurrency Fraud Case
Prosecutors allege that he embezzled billions of dollars from FTX customer funds to cover losses at Alameda, purchase luxury real estate, and contribute to US political campaigns.
Sam Bankman-Fried has pleaded not guilty, acknowledging risk management failures but disputing the more serious allegations. He has also expressed difficulties in preparing for trial due to limited internet access at Brooklyn’s Metropolitan Detention Center.
Earlier on the same day, Judge Kaplan limited Bankman-Fried’s ability to call expert witnesses to testify at trial.
Court documents indicated that Bankman-Fried’s legal team intended to use expert testimony to support arguments that FTX’s terms of service did not prohibit the use of customer funds for investments, a common practice in the cryptocurrency industry similar to how banks use deposits for loans.
However, Kaplan ruled that three proposed witnesses could not testify because their testimony was irrelevant or potentially confusing to the jury.
He left open the possibility for Bankman-Fried to call the remaining four experts, but only for the purpose of rebutting prosecution witnesses.
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