Former FTX CEO Sam Bankman-Fried is facing the possibility of having his bail revoked as federal prosecutors claim that he violated court orders by using encrypted technology.
What the prosecutors claim Sam Bankman-Fried did
The prosecutors sent a letter to the court claiming that Sam Bankman-Fried used a virtual private network (VPN) to watch the Super Bowl, which is in violation of a previous court order against using encrypted technology.
During a hearing to discuss the letter, the former crypto mogul’s lawyer called the measures “draconian” and argued that his client needed access to the internet and applications like Google Docs to prepare for his coming trial effectively.
However, U.S. District Court Judge Lewis Kaplan seemed to disagree with Cohen and suggested that the government’s proposed measures might not be enough to keep him from meddling with the case or otherwise breaking the conditions of his bail.
Kaplan told the court he had “probable cause to believe” that Bankman-Fried may have committed “witness tampering,” which is a felony, and expressed doubt that he was, in fact, using a VPN to watch football.
Sam Bankman-Fried’s use of the VPN was not an intentional transgression, but instead an oversight, according to his lawyer. Kaplan responded that “the condition was no encryption,” and he expressed concern about the prosecution’s proposal to install monitoring software on a single cellphone and laptop in Bankman-Fried’s parents’ home in California, where he is currently living.
Kaplan also made an unorthodox request for Bankman-Fried’s legal team to provide an independent technology expert for the court’s use, who Kaplan suggested could work “effectively like a law clerk” and counsel him on the risks posed by VPNs and “other gizmos.”
If Bankman-Fried continues to defy the terms of his bail, revocation proceedings – a hearing to decide whether Bankman-Fried must await his trial in prison – could be on the table.
The deadline for new recommended guidelines for the bail bail terms has been extended to the 21st for both the prosecutors and SBF’s attorneys.
More concerns have been raised
Federal prosecutors are concerned that Bankman-Fried may be accessing crypto services or communicating with folks involved in the case using a VPN.
In a letter sent to New York federal Judge Lewis Kaplan, prosecutors said Sam Bankman-Fried used a VPN on Jan. 29 and Feb. 12. The defense team claimed that he was using a VPN to access his subscription to NFL Game Pass, which was still localized to The Bahamas.
This latest development could potentially put new restrictions on how Bankman-Fried is allowed to access the internet. Kaplan had previously expressed his annoyance with how easily the disgraced figure has been able to communicate, especially after prosecutors alleged that he was using encrypted messaging services like Signal to communicate with former employees.
Sam Bankman-Fried has not been shy about taking to the internet to make his case to the world, attempting to rewrite the narrative on FTX’s collapse and fight allegations he was involved in a scheme to use customer funds to underwrite his crypto hedge fund Alameda Research.
