FTX founder Sam Bankman-Fried's lawyers blast 'innuendo, speculation, and scant facts' from prosecutors

FTX founder Sam Bankman-Fried's defense attorneys asserted Tuesday that prosecutors are wrongly using "innuendo, speculation, and scant facts" to jail their client before trial.

Those comments came in a written response to U.S. District Court Judge Lewis Kaplan, who last week had asked for more arguments as he weighs whether Bankman-Fried will remain out of jail or get returned to custody before his trial. 

The disgraced cryptocurrency CEO faces federal charges from the Department of Justice for an alleged "wide-ranging scheme by the defendant to misappropriate billions of dollars of customer funds deposited with FTX … and mislead investors and lenders to FTX and to Alameda Research." 

He as pleaded not guilty and has been out of jail since December on a $250 million bond. 

FTX FOUNDER SAM BANKMAN-FRIED REMAINS OUT ON BAIL AS JUDGE CONSIDERS DECISION ON DETENTION

However, Assistant U.S. Attorney Danielle Sassoon sought to revoke Bankman-Fried's bail, alleging that he attempted to "discredit and intimidate" witnesses in his case, leading them to conclude that "no set of conditions" can now guarantee the "safety of the community." 

The prosecutor alleged that post-FTX collapse, the FTX founder went on "a media tour."

Bankman-Fried engaged in an extensive amount of communications with reporters, including 100 emails and 1,000 phone calls, Sassoon claimed. The prosecution alleged over 100 of the phone calls were directed toward the author of a recent New York Times article that involved parts of a diary written by former Alameda Research CEO Caroline Ellison. 

Ellison, the former CEO of Alameda — and Bankman-Fried's ex-girlfriend — pleaded guilty to conspiracy to commit wire fraud, wire fraud and conspiracy to commit commodities fraud in December in exchange for "cooperating with the Government," DOJ said at the time. 

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In their filing Tuesday, Bankman-Fried's attorneys said their client was merely defending his reputation in responding to the reporter who had gathered information elsewhere for his article. They said it was his First Amendment right to speak with reporters when so many articles reflect negatively on him.

"In support of its theory that Mr. Bankman-Fried 'tampered' with witnesses, the Government proffers evidence that consists of innuendo, speculation, and scant facts," the lawyers wrote. "The Government’s showing is a far cry from the evidence presented in cases in this district where remand has been ordered in connection with alleged witness tampering, and in no way supports revocation of Mr. Bankman-Fried’s bail."

The defense argued the Times story was sympathetic to Ellison and damaging to their client. They further accused prosecutors of leaking information to the Times they said could not have come from Bankman-Fried. 

Kaplan has imposed a gag order on all parties while he considers the bail-revocation request. 

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It has been nearly nine months since FTX imploded. The cryptocrurrency exchange went from at one point being worth $32 billion to entering Chapter 11 bankruptcy in November along with Alameda Research and other related entities. 

John Ray III has been in charge of the company since it filed for bankruptcy in November, the same time in which Bankman-Fried resigned from being CEO. Authorities brought Bankman-Fried back to the U.S. from the Bahamas via extradition in December.  

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FTX’s collapse negatively affected other crypto firms and has led to efforts by lawmakers to add more regulation to the industry. 

Fox News' Aislinn Murphy, Marta Dhanis and the Associated Press contributed to this report.