U.S. Prosecutors Push for Tighter Restrictions on Bankman-Fried's Online Access

U.S. Prosecutors Push for Tighter Restrictions on Bankman-Fried's Online Access
Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, leaves federal court in New York City, U.S., February 9, 2023. REUTERS/Mike Segar/File Photo

A U.S. District Judge has imposed strict restrictions on indicted FTX cryptocurrency exchange founder Sam Bankman-Fried's internet use. The judge has barred the 30-year-old former billionaire from contacting current or former employees at his exchange and Alameda Research hedge fund. Additionally, he is prohibited from using encrypted messaging apps that let users auto-delete messages, such as Signal.

Prosecutors in Manhattan raised concerns that Bankman-Fried may be attempting to influence potential witnesses ahead of his October trial on charges of diverting billions of dollars in FTX customer funds to his hedge fund, Alameda Research. The judge has barred him from using the internet except to review the evidence against him or use email on his Gmail account.

Prosecutors have also urged the judge to prohibit him from using a virtual private network (VPN) to access the internet after the ban was imposed. Bankman-Fried's lawyers argued his efforts to contact FTX's current general counsel, and chief executive attempted to help, not to interfere. They also proposed letting him communicate by phone, email, SMS text messaging, and Twitter direct messaging while disabling iMessage from his phone.

The judge is set to hold a hearing on Bankman-Fried's bail conditions on Thursday. Earlier on Wednesday, he released documents showing that former Stanford Law School dean Larry Kramer, and Stanford computer science researcher, Andreas Paepcke, co-signed Bankman-Fried's bond alongside his parents.

Photo by Y S / Unsplash

Bankman-Fried's parents, Joseph Bankman and Barbara Fried, both Stanford law professors, had pledged their Palo Alto, California home as collateral as part of the $250 million bail package ensuring their son's return to court. The names of the two other sureties were redacted, but the judge ruled in favor of media outlets, including Reuters, that argued the public had a right to know their identities.

Bankman-Fried argued that the guarantors' safety was at risk but decided not to pursue an appeal of the ruling. In a statement, Kramer said he and his wife had been friends with Bankman and Fried for decades, and they have sought to support them as they face their own crisis.

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Disgraced FTX Founder Sam Bankman-Fried Arrested, Bahamas Says U.S. authorities filed criminal charges against Bankman-Fried.
USA Damian Williams: Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY. We expect to move to unseal the indictment in the morning and will have more to say at that time. — US Attorney