Sam Bankman-Fried may no longer contact FTX and Alameda Research employees or use encrypted means of communication, if judged US District Judge Lewis Kaplan on Wednesday. The judge’s decision follows an attempt by Bankman-Fried to “sort things out” with a potential witness.
Bankman-Fried used Signal
The restriction was placed on Bankman-Fried following last week’s allegations that he contacted potential witnesses in January via the encrypted messaging platform Signal. In doing so, Bankman-Fried probably hoped to influence the witnesses to strengthen his own case and possibly avoid greater penalties.
That plan did not succeed, because the judge is now aware of the incident. This now not only results in a ban on Bankman-Fried from communicating with FTX employees, but may also result in a higher sentence.
Incidentally, it is not yet certain that the measure against Bankman-Fried is final. Both camps will have the opportunity on February 7 to share arguments for and against with the judge. For now, however, the court is of the opinion that there is sufficient evidence to at least temporarily impose the measure on the fallen entrepreneur.
Witness manipulation
Federal prosecutors are claiming that Bankman-Fried’s conduct may have amounted to “witness manipulation” when he contacted current FTX US General Counsel via Signal. The latter is a person with intimate knowledge of Bankman-Fried’s behavior leading up to the implosion of FTX in November of last year.
“I would very much like to get in touch again to see if there is a way for us to build a constructive relationship and use each other as resources or at least discuss things with each other,” Bankman-Fried wrote, according to the US prosecutors to the General Counsel of FTX US.
After the implosion of FTX, Bankman-Fried was arrested fairly quickly on suspicion of eight financial crimes related to the collapse of the exchange platform. On January 3, he pleaded “not guilty” to the charges and is now awaiting trial, which is scheduled for October 2023.