News Update

Prosecutors demands to impose stricter bail on Sam Bankman-Fried

• ByStartupStory     |    January 28, 2023

Prosecutors in the United States asked a Manhattan judge on Friday to impose stricter bail conditions on Sam Bankman-Fried, citing concerns that the founder of the FTX cryptocurrency exchange might tamper with witnesses or destroy evidence in his criminal case.

Prosecutors asked U.S. District Judge Lewis Kaplan to prohibit Bankman-Fried from communicating with current or former employees of FTX or his Alameda Research hedge fund, other than family, unless a lawyer is present.

They also requested that Bankman-Fried refrain from using Signal or other encrypted call and messaging apps, though he could still communicate via text messages, email, and phone.

Bankman-Fried, 30, has been released on $250 million bail and ordered to live with his parents since pleading not guilty to stealing billions of dollars from the now-defunct FTX.

Prosecutors cited a Signal message sent by Bankman-Fried on Jan. 15 to “Witness-1,” the general counsel of the FTX U.S. affiliate, in their letter on Friday. Bankman-Fried expressed a desire for a “constructive relationship” or to “at least vet things with each other.”

Prosecutors said this was “particularly concerning” because Bankman-Fried knew the general counsel had potentially damaging information because he had participated in communications just before FTX’s November collapse in which he discussed using Alameda funds to satisfy FTX customer withdrawals.

“The defendant’s request to ‘vet things with each other’ is suggestive of an effort to influence Witness-1’s potential testimony, and the appeal for a ‘constructive relationship’ likewise implies that Witness-1 should align with the defendant,” prosecutors said.

“Even if the defendant has not directly attempted to tamper with witnesses, (his) contact with witnesses may intimidate them” into not coming forward or testifying, prosecutors added.

Prosecutors claimed that in 2021, Bankman-Fried directed that many Signal and Slack communications be autodeleted after 30 days.

Prosecutors claimed that former Alameda chief Caroline Ellison, who pleaded guilty in the case and is cooperating with them, told them that Bankman-Fried had stated that it would be more difficult to build legal cases if information was not preserved.

 

 

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