Crypto Tycoon Sam Bankman-Fried Banned From Encrypted Communication With FTX Staff
• US District Judge Lewis Kaplan ruled that Sam Bankman-Fried is not allowed to communicate with FTX staff through encrypted messages.
• It was put in place as a result of allegations that Bankman-Fried contacted a possible witness earlier this month via the encrypted messaging service Signal.
• Bankman-Fried has been charged with eight financial offenses in relation to the collapse of the exchange.
Sam Bankman-Fried Is Not Allowed To Communicate With FTX Staff Through Encrypted Messages
US District Judge Lewis Kaplan ruled on Wednesday that Sam Bankman-Fried is no longer permitted to speak with FTX and Alameda workers or use encrypted communications. The limitation was put in place as a result of Friday’s allegations that the disgraced crypto tycoon had contacted a possible witness earlier this month via the encrypted messaging service Signal in an effort to build a better rapport. Judge Kaplan found it was „clearly and convincingly sufficient“ to impose the restrictions until a further determination could be made, according to a recent filing. The court plans to let both legal teams present arguments for or against the measure, which was initially proposed as a bail modification, on Feb. 7.
The Allegation Of Witness Tampering
When Bankman-Fried contacted „the current General Counsel of FTX US,“ federal prosecutors claimed that this may have amounted to „witness tampering.“ U.S. prosecutors claimed Bankman-Fried wrote, I would really want to reconnect and see if there is a way for us to have a productive connection, use each other as resources when possible, or at least vet things with each other.
Collapse Of The Exchange
Bankman-Fried’s FTX declared bankruptcy in November as a result of a run on the platform brought on by sharp decline in FTT (FTX’s native cryptocurrency). As a result of the run on FTX, it was obliged to file for bankruptcy since it could not recognize withdrawals and did not maintain one-to-one reserves of customer assets. After being detained, Bankman-Fried was charged with eight financial offenses related to the collapse of his exchange including stealing billions from customers‘ money for his own trades and purchases.. He entered not guilty plea on January 3rd and trial is set for October 2021..
Bail Modification Request
The bail modification request will be heard by both legal teams on February 7th where they can present arguments regarding whether or not these restrictions should remain in effect until further notice from Judge Kaplan..
In conclusion, US District Judge Lewis Kaplan has imposed restrictions barring Sam Bankmann Fried from communicating with FTX staff through any form of encryption after allegations were raised accusing him of witness tampering by contacting ‘Witness 1’ (the current General Counsel) via Signal app back in January 2021. At this time he stands accused of 8 financial offences related indirectly or directly connected with collapse his own exchange -FTT-. Both legal teams are due present their arguments regarding validity/invalidity these restrictions before court adjourns judgement on February 7th 2021