Sam Bankman-Fried trial jury sees his profane message about regulators

(Note language in paragraph 5 that readers may find offensive)

By Luc Cohen

NEW YORK (Reuters) - A U.S. judge on Wednesday overruled objections by Sam Bankman-Fried's lawyers and allowed jurors in the FTX founder's fraud trial to see a profane message he sent to a reporter days after the cryptocurrency exchange collapsed complaining that regulators "make everything worse."

It was one of several private messages that Bankman-Fried sent to a reporter for the news website Vox on Twitter, the social media platform now called X, that the defense sought to keep away from the jury during the trial in Manhattan federal court.

In the trial, which began on Oct. 3, Bankman-Fried stands accused of looting billions of dollars in FTX customer funds to make investments, donate to U.S. political campaigns and prop up his hedge fund, Alameda Research. The former billionaire has pleaded not guilty to two counts of fraud and five counts of conspiracy. Bankman-Fried, 31, could face decades in prison if convicted.

Bankman-Fried's lawyers had sought to bar prosecutors from introducing the messages as evidence, arguing that the defendant sent the "off-the-cuff musings" after the time period at issue in the trial and that the language would bias the jury against him.

In one of the messages, Bankman-Fried told the reporter, "fuck regulators" and quickly added in another message, "they make everything worse."

In arguing for allowing the jury to see the messages, prosecutor Danielle Sassoon said that they were "highly probative" of his true state of mind at the time, noting that Bankman-Fried later told the reporter he thought the conversation had been off the record.

Vox ultimately published the messages.

Bankman-Fried wrote that his prior statements in favor of regulating cryptocurrency were "just PR," meaning public relations.

"It doesn't reflect his honest attempt at the time when he was engaging with regulators," defense lawyer Christian Everdell said outside the jury's presence, arguing against allowing the messages as evidence.

Prosecutors have said they could rest their case as soon as Oct. 26. Bankman-Fried's lawyers have said he is considering testifying in his own defense.

(Reporting by Luc Cohen in New York; Editing by Will Dunham)