DOJ to ban Sam Bankman Fried from contacting FTX staff

DOJ to ban Sam Bankman-Fried from contacting FTX staff

The Justice Department on Friday ordered a federal judge to bar FTX founder Sam Bankman-Fried from communicating with current and former employees of the collapsed crypto exchange without an attorney present, after prosecutors allege he recently contacted a potential witness in his criminal case .

Mr. Bankman-Fried, who is charged with imploding FTX, contacted the general counsel of the company’s US operation via an encrypted messaging app earlier this month, federal prosecutors said in a filing. Prosecutors said Mr Bankman-Fried also contacted other current and former FTX employees and was concerned the communications could lead to witness tampering.

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Prosecutors also asked the judge to ban Mr. Bankman-Fried from communicating through encrypted messaging apps like Slack and Signal, saying when he ran FTX, he directed employees at the company and its crypto investment firm Alameda Research to use their Discontinue communication on these platforms, automatic deletion after 30 days. That policy has hampered the government’s investigation, prosecutors said.

“Potential witnesses have described relevant and incriminating conversations with the defendant that took place on Slack and Signal that have already been automatically deleted due to settings made at the defendant’s direction,” the prosecutor’s file said.

Lawyers for Mr Bankman-Fried said in a letter to the judge that the government had mischaracterized their client’s harmless conduct “in an apparent attempt to portray our client in the worst possible light”. They said the government’s request was excessive and unnecessary, and instead proposed banning Mr Bankman-Fried from contacting certain limited witnesses, not all current and former FTX employees.

FTX’s US General Counsel, Ryne Miller, was not immediately available.

The Manhattan US Attorney’s Office last month charged Mr. Bankman-Fried with stealing billions of dollars from FTX customers while misleading lenders and investors. He has pleaded not guilty and is currently being held in court-ordered custody at his parents’ home in Palo Alto, California, while awaiting trial.

Mr Bankman-Fried sent a signal message to the General Counsel on January 15, in which prosecutors claimed he would “really like to get back in touch and see if there’s a way for us to have a constructive relationship, each other as resources.” to use, if possible, or at least check things out with each other.”

Prosecutors did not identify the other employees Mr Bankman-Fried allegedly attempted to contact, but called the messages to the General Counsel and others disturbing.

“If the defendant were to ‘verify’ his version of relevant events with potential witnesses, this could result in witnesses being discouraged from testifying in a manner contrary to the defendant’s account,” the Justice Department said in the filing.

Lawyers for Mr. Bankman-Fried said the message to Mr. Miller was reasonably read as an attempt by Mr. Bankman-Fried to offer his support to FTX rather than a “sinister attempt” to influence testimony in court.

Write to James Fanelli at [email protected]

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