NEW YORK, Sept 19 (Reuters) - A federal appeals court on Tuesday appeared skeptical of former cryptocurrency billionaire Sam Bankman-Fried's argument that being jailed just two months before his trial on federal fraud charges violated his right to free speech.
U.S. District Judge Lewis Kaplan 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.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan challenged Bankman-Fried lawyer Mark Cohen's assertion that Kaplan had not sufficiently considered the defendant's right under the U.S. Constitution's First Amendment to speak with the press and try to restore his reputation.
"There isn't a First Amendment right to try to discredit or influence a witness who might testify against you, is there?" U.S. Circuit Judge Denny Chin said.
Bankman-Fried faces seven charges of fraud and conspiracy stemming from the November 2022 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. He has pleaded not guilty, while acknowledging risk management failures.
The judges appeared slightly more open to Bankman-Fried's argument that jailing him violates his right under the Constitution's Sixth Amendment to aid in his own defense because his case is complicated and he lacked internet access in jail to review prosecutors' evidence.
They questioned Danielle Sassoon, a prosecutor, about what Cohen said were inadequacies in accommodations Kaplan and the MDC had made to try to allow Bankman-Fried to access the internet, including by visiting his lawyers in a cell at the federal courthouse in Manhattan twice a week.
Sassoon said the government had taken "extraordinary measures" to try to help Bankman-Fried prepare for trial from behind bars, and that Bankman-Fried had seven months with unrestricted internet access while free on $250 million bail at his parents' Palo Alto, California, home.
U.S. Circuit Judge William Nardini said Bankman-Fried should have considered the possibility of losing internet access before sharing Ellison's writings.
"If it is true that he has intimidated witnesses, at a certain point, he makes his own bed, he sleeps in it," Nardini said.
Kaplan in a written ruling last week said that Bankman-Fried had not specified which pieces of evidence he had been unable to access and noted that the defendant had not asked for a trial delay despite the judge's offer to consider one.
Reporting by Luc Cohen in New York; additional reporting by Jonathan Stempel in New York Editing by Will Dunham and Nick Zieminski
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