FTX’s Sam Bankman-Fried must stop contacting former employees, prosecutors say

The Justice Department indicted Sam Bankman-Fried on eight criminal charges in December, including fraud and money laundering, and relations between the disgraced FTX founder and prosecutors have grown increasingly strained since then.

The latest example came Friday night, when prosecutors complained that Bankman-Fried had been in contact with potential witnesses in his criminal trial. In a letter to U.S. District Judge Lewis Kaplan, they cited Bankman-Fried’s alleged communication with FTX General Counsel Ryan Miller.

On Jan. 15, prosecutors said Bankman-Fried contacted Miller through the encrypted messaging platform Signal, as well as by email, and wrote, “I would really like to reconnect and see if there is a way we can have a constructive relationship, use each other as resources when possible, or at least check things out with each other.

Prosecutors added that Bankman-Fried contacted other current and former FTX employees, reflecting what they described as a “history of using the app for obstructive purposes,” suggesting Bankman-Fried was trying to influence potential witness statements.

Because of Bankman-Fried’s activities, prosecutors asked Judge Kaplan for two new bail conditions: that Bankman-Fried cannot contact current or former FTX or Alameda employees and that he is not allowed to use anything encrypted or ephemeral calling or messaging platforms like Signal. Bankman-Fried currently has full access to the Internet, which is said to be one of the reasons he agreed to be extradited back to the United States from the Bahamas.

Prosecutors say the new conditions are necessary to “prevent obstruction of justice.”

In a letter filed with Judge Kaplan on Saturday morning, Bankman-Fried’s attorneys pushed back, writing that the government was “obstructing” any efforts by the two teams to work together to change bail conditions.

According to Bankman-Fried’s lawyers, prosecutors told Bankman-Fried’s defense team on Jan. 19 that they knew he had contacted John Ray, FTX’s new CEO, as well as Miller, which prosecutors said was inappropriate . They told Bankman-Fried’s attorneys that they would request an additional bail condition that would prevent Bankman-Fried from contacting potential witnesses without attorneys present.

Bankman-Fried’s attorneys argued that their client had been publicly trying to contact Ray to offer help in the bankruptcy, and that he had the same charitable motives for contacting Miller, describing it as a “harmless attempt to offer help “.

However, they agreed to the proposed bail condition to avoid litigation.

But his lawyers now say the prosecutor’s updated restrictions — which would include contacting any current or former employees, as well as restricting Bankman-Fried’s use of messaging platforms — go beyond the scope originally proposed.

“The government clearly believes that a one-sided presentation — designed to cast our client in the worst possible light — is the best way to obtain the result it seeks,” Bankman-Fried’s attorneys wrote, arguing that by filing the letter at 6:00 a.m. on Friday, the defense team will not be able to offer a response to the negotiations.

Bankman-Fried’s lawyers proposed a different stipulation that would have barred Bankman-Fried from contacting several key FTX figures, including Caroline Ellison, Zixiao “Gary” Wang, Nishad Singh and “Witness-1” or Ryne Miller, as well as “others will be discussed with the government.” They also do not want his access to messaging platforms to be restricted.

Finally, they asked Judge Kaplan to lift a bail condition imposed in January that barred Bankman-Fried from accessing FTX and Alameda assets, arguing that prosecutors had offered no evidence that Bankman- Fried has been behind the transfers since late December.

The latest conflict comes after Assistant US Attorney Daniel Sassoon accused the FTX founder in early January of transferring Alameda assets from a crypto wallet, persuading the judge overseeing the case to limit Bankman-Fried’s access to the company’s funds and implying , that his word should not be taken , given the amount of false information he has tweeted in the past.

Attorneys for Bankman-Fried did not immediately respond to a request for comment from Happiness.

The decision is now in the hands of Judge Kaplan.

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