Federal prosecutors in Manhattan said on Friday that disgraced cryptocurrency executive Sam Bankman-Fried had tried to contact a potential witness in his criminal case, and asked a judge to impose new bail conditions that limit his ability to communicate with former colleagues.
In a court filing, the US attorney’s office for the Southern District of New York said Bankman-Fried sent messages via email and the encrypted messaging app Signal this month to the general counsel of FTX’s US branch, the cryptocurrency exchange he founded. . Mr. Bankman-Fried, 30, has been charged with fraud, money laundering and campaign finance violations related to the FTX implosion last year.
The communication was “suggestive of an effort to influence the potential testimony of Witness-1,” the filing said. “This is particularly concerning given that the defendant knows that Witness-1 has information that would tend to incriminate the defendant.”
Prosecutors have asked Judge Lewis A. Kaplan, who is overseeing Mr. Bankman-Fried’s case, to bar the businessman from contacting current and former FTX employees or using Signal or other encrypted apps to communicate.
A Bankman-Fried spokesman did not immediately respond to a request for comment.
Mr. Bankman-Fried built FTX into one of the largest cryptocurrency exchanges in the world before the company filed for bankruptcy in November. He was arrested in December at his home in the Bahamas, where he had his FTX headquarters, and later extradited to the United States to face criminal charges. Judge Kaplan granted him bail under very restrictive conditions, confining him to his parents’ home near the Stanford University campus in northern California.
What to know about the FTX crash
What is FTX? FTX is a now bankrupt company that was one of the largest cryptocurrency exchanges in the world. It allowed customers to exchange digital currencies for other digital currencies or traditional money; it also had a native cryptocurrency known as FTT. The Bahamas-based company built its business on risky trading options that are not legal in the United States.
Mr. Bankman-Fried has pleaded not guilty to the charges against him.
Since his home confinement, Mr Bankman-Fried has entertained visitors, including author Michael Lewis, who is writing a book about him. He also began mounting a defense, writing Substack posts detailing his version of the events leading up to FTX’s collapse.
According to Friday’s filing, Mr. Bankman-Fried wrote to FTX US’s general counsel on January 15 and said that he would “really love to reconnect with us and see if there is a way for us to have a constructive relationship, using each other as a means”. where possible, or at least examine things against each other.
Prosecutors said the witness “has firsthand knowledge of the defendant’s conduct during the accused conspiracies” and engaged in communications on Signal and the Slack messaging system with a small group of insiders the month FTX collapsed. Mr. Bankman-Fried also communicated with other current and former FTX employees, according to the document.
The document does not identify the witness by name. The General Counsel for FTX US is ryne milleraccording to his LinkedIn page.
For much of his tenure at FTX, Mr. Bankman-Fried relied on Signal, which gives people the option to automatically delete messages. According to prosecutors, he also ordered employees of FTX and Alameda Research, a hedge fund he founded, to set their communications to automatically disappear after 30 days or less.
The consequences of the fall of FTX
The spectacular collapse of the cryptocurrency exchange in November has left the industry stunned.
“The automatic removal of Slack and Signal communications from FTX and Alameda has prevented the government investigation,” the filing reads. “Potential witnesses have described relevant and incriminating conversations with the defendant that took place on Slack and Signal that have since been automatically deleted.”
In the court filing, prosecutors said Bankman-Fried’s use of Signal could obstruct their efforts to determine whether they tried to contact more potential witnesses during their confinement.
“The proposed bail conditions in combination would more effectively prevent the defendant from obstructing justice,” the filing says.
