A U.S. judge on Thursday extended the ban on FTX cryptocurrency exchange founder Sam Bankman-Fried from contacting employees of companies he once controlled and using encrypted messaging technology while he awaits bail on fraud charges.
On February 1, US District Judge Lewis Kaplan temporarily barred Bankman-Fried from contacting current or former employees FTX or Alameda Research, his hedge fund, after prosecutors raised concerns the 30-year-old former billionaire might be trying to tamper with witnesses.
As a condition of his release on $250 million (almost Rs.2,060 billion) bail, the judge also barred Bankman-Fried from using the news applications such as signal which allows users to automatically delete messages.
After rejecting an agreement between defense attorneys and prosecutors to ease those conditions on Tuesday, Kaplan said on Thursday the restrictions would remain in place through February 21, directing both sides to explain how by February 13 They could be assured that Bankman-Fried will not electronically delete communications.
“I’m far less interested in the comfort of the defendant” than in preventing possible witness tampering, Kaplan said at a federal court hearing in Manhattan.
“There’s still snail mail and email, and there are all kinds of communications that don’t pose the same risks,” Kaplan added.
Defense attorneys have argued that Bankman-Fried’s efforts to contact an FTX general counsel and his new chief executive, John Ray, were attempts to offer “help” and not to interfere.
Bankman-Fried, who prosecutors have accused of defrauding investors and causing billions of dollars in losses, pleaded not guilty to eight counts Jan. 3, including wire fraud and money laundering conspiracy. If convicted, he faces up to 115 years in prison, although any sentence would ultimately be determined by a judge based on a number of factors.
His agreement with prosecutors would have allowed him to use means of communication such as zoom and SMS, as well Whatsapp if he has surveillance technology installed on his phone. It would also have exempted some people from the lockdown without disclosing who they were.
A prosecutor, Danielle Sassoon, told the judge the individuals are connected to FTX but are not the focus of the government case and are not expected to testify.
“We don’t want to completely eliminate the defendant’s ability to communicate,” Sassoon said.
Bankman-Fried originally suggested only placing a ban on certain potential witnesses, such as former Alameda CEO Caroline Ellison and former FTX chief technology officer Zixiao “Gary” Wang, who have pleaded guilty to fraud and with prosecutors work together. Bankman-Fried had also agreed to withdraw his appeal against a bail condition that prevented him from playing on FTX, Alameda or cryptocurrency Financial assets.
Bankman-Fried boomed in bitcoin and other digital assets to amass an estimated fortune of $26 billion (nearly Rs. 2,14,500) and become an influential political donor. FTX collapsed and filed for bankruptcy in November. Bankman-Fried was extradited from the Bahamas, where he had lived and where the exchange was based, to face criminal charges.
© Thomson Reuters 2023
