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Bankman-Fried loses bid for release from jail during trial

NEW YORK (Reuters) – Sam Bankman-Fried, the indicted founder of now-bankrupt cryptocurrency exchange FTX, on Thursday lost his bid to be released from jail during his fraud trial starting next week.

Bankman-Fried’s lawyers on Sept. 25 asked U.S. Judge Lewis Kaplan in Manhattan to grant him temporary release, arguing they would not otherwise be able to properly represent him.

They said they would need to speak with him after each trial day to prepare for the next day’s witnesses and testimony, which they could not do if he were taken back to the Metropolitan Detention Center in Brooklyn at the end of each trial day.

“He is the defense’s key resource and should be entitled to participate meaningfully in his own defense,” his lawyers wrote in a letter to Kaplan, adding that he would either be with his lawyers or with a private security guard at a temporary New York City residence at all times.

Prosecutors opposed the request in a Sept. 27 letter to Kaplan, calling the challenges the 31-former billionaire’s lawyers flagged “inconveniences common to all incarcerated defendants.”

They said Bankman-Fried had be given two laptops to review evidence delivered to him on hard drives in jail to help him prepare for trial, which they called “accommodations beyond those accorded to most detainees.”

Prosecutors say Bankman-Fried stole billions of dollars in FTX customer deposits to plug losses at Alameda Research, a crypto-focused hedge fund he controlled.

Bankman-Fried has pleaded not guilty. He has acknowledged risk management failures, but said he did not steal funds.

Kaplan jailed him on Aug. 11, after finding he likely tampered with witnesses at least twice – including by sharing former Alameda chief executive officer Caroline Ellison’s private writings with a New York Times reporter.

Ellison, also Bankman-Fried’s former romantic partner, has pleaded guilty to fraud and is set to testify against him.

The trial starts on Oct. 3 and could last up to six weeks.

(Reporting by Luc Cohen in New York, Editing by Nick Zieminski)

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