By Luc Cohen
NEW YORK (Reuters) - Sam Bankman-Fried must be jailed pending his October fraud trial over the collapse of the FTX cryptocurrency exchange he founded because he is trying to intimidate witnesses and influence their testimony, prosecutors said on Friday.
Bankman-Fried, a former billionaire, has lived mainly under house arrest at his parents' Palo Alto, California, home since his December 2022 extradition from the Bahamas.
His bail, which includes a $250 million bond, became an issue after the New York Times on July 20 published an article containing excerpts from his former romantic partner Caroline Ellison's personal Google (NASDAQ:GOOGL) documents prior to FTX's collapse.
Bankman-Fried, 31, acknowledged sharing the documents with a Times reporter. The U.S. Attorney's office in Manhattan said that crossed the line, and that Bankman-Fried's efforts to intimidate witnesses amounted to witness tampering.
" (T)he defendant certainly has the right to speak and defend himself to the press," prosecutors said in a letter to U.S. District Judge Lewis Kaplan.
"What the defendant may not do, and what he has now done repeatedly, is seek to corruptly influence witnesses and interfere with a fair trial through attempted public harassment and shaming," prosecutors added.
A spokesperson for Bankman-Fried declined to comment. His lawyers have until Aug. 1 to respond to the government's letter.
Bankman-Fried has pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund, where Ellison was chief executive.
Prosecutors first made their surprise request to detain Bankman-Fried before his Oct. 2 trial at a Wednesday hearing, where Kaplan barred Bankman-Fried from discussing the case.
His lawyer said at Wednesday's hearing that Bankman-Fried's communications with journalists were simply a means to protect his reputation.
Prosecutors had in January accused Bankman-Fried of seeking to influence the testimony of an FTX lawyer.
In writings cited by the Times, Ellison described being "unhappy and overwhelmed" with her job and feeling "hurt/rejected" from her breakup with Bankman-Fried.
Ellison pleaded guilty to fraud charges and is expected to testify against Bankman-Fried at trial.
She said in court last December that Bankman-Fried and other FTX executives received billions of dollars in hidden loans from Alameda.
Two former FTX executives, Gary Wang and Nishad Singh, have also pleaded guilty over FTX's collapse and agreed to cooperate with prosecutors.