© Reuters. FILE PHOTO: Former FTX CEO Sam Bankman-Fried, who faces fraud charges in the collapse of the bankrupt cryptocurrency exchange, arrives for his hearing in federal court in New York City, U.S., on Tuesday. on February 9, 2023. REUTERS/Shannon Staplet
By Jonathan Stempel
NEW YORK (Reuters) – Lawyers for Sam Bankman-Fried are nearing a deal with US prosecutors over revised bail conditions for the accused founder of cryptocurrency exchange FTX, who is trying to win over a skeptical judge. that he should remain free.
In a letter filed late Friday in Manhattan federal court, Bankman-Fried’s attorney, Christian Everdell, said both sides believed they were “close to a resolution” and expected to formally propose new restrictions by next week.
Bankman-Fried, 31, faces trial set for October 2 on charges of stealing billions of dollars in funds from FTX clients to cover losses at his Alameda Research hedge fund and making large illegal political donations to buy influence in Washington, D.C.
The bail talks came this week after U.S. District Judge Lewis Kaplan renewed in a March 10 hearing his concern that Bankman-Fried’s electronic communications with others could exceed the limits of his bail package of $250 million.
Kaplan’s approval is needed to modify the Bankman-Fried bond.
The former billionaire has pleaded not guilty to eight charges and has yet to be arraigned on four. He lives under house arrest with his parents in Palo Alto, California.
Prosecutors raised the specter of witness tampering in January after Bankman-Fried tried to contact John Ray, who became FTX’s chief executive when the company filed for bankruptcy in November, and an in-house attorney.
Bankman-Fried’s lawyers have said their client was trying to help, not interfere.
At the March 10 hearing, prosecutors and defense attorneys proposed giving Bankman-Fried a flip phone without Internet access and a basic laptop with limited features.
That was too generous for Kaplan, who said Bankman-Fried was “inventive” and could possibly “find a way around” the restrictions without getting caught.
In Friday’s letter, Everdell also requested the judge’s permission to allow Bankman-Fried, in the meantime, to use a laptop to access some FTX materials.
Although the laptop would lack monitoring software or would restrict Bankman-Fried’s Internet access, an attorney or paralegal would monitor its use and take the laptop away when Bankman-Fried was done with it, Everdell said.
The case is US v. Bankman-Fried, US District Court, Southern District of New York, No. 22-cr-00673.
