Court Battles

Judge grants DOJ request to block Bankman-Fried from contacting employees, using encrypted messaging apps

Cryptocurrency entrepreneur Sam Bankman-Fried arrives for an appearance at Manhattan federal court Tuesday, Jan. 3, 2023, in New York. (AP Photo/Craig Ruttle)

A district judge granted a request from the Department of Justice (DOJ) on Wednesday to block FTX founder Sam Bankman-Fried from contacting current and former employees and using encrypted messaging apps as conditions of his release.

New York District Judge Lewis Kaplan set a hearing for next Tuesday to discuss the terms of Bankman-Fried’s release, but agreed to DOJ’s conditions in the meantime.

Damian Williams, the U.S. attorney for the Southern Distirct of New York, had asked the court to update Bankman-Fried’s bail conditions on Friday amid concerns about witness tampering. 

The former head of the crypto trading platform reportedly contacted an individual last month with “firsthand knowledge” about his actions during the November 2022 collapse of FTX, someone who could potentially serve as a government witness at trial. He also reached out to several other current and former FTX employees.

In his message to the potential witness, Bankman-Fried suggested that they “use each other as resources when possible, or at least vet things with each other,” which Williams argued appeared to be an effort to influence the individual’s future testimony.

As a result, Williams asked the court to bar Bankman-Fried from contacting current and former employees at both FTX and his hedge fund Alameda Research. 

Judge Kaplan also granted Williams’s request to block the FTX founder from using encrypted or ephemeral messaging and calling platforms.

Bankman-Fried used both email and the encrypted messaging platform Signal to contact the potential witness and has a history of using automatic deletion functions on platforms like Signal and Slack, according to the attorney.

Tags DOJ FTX FTX FTX collapse Lewis Kaplan Sam Bankman-Fried

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