Judge Restricts FTX Founder Sam Bankman-Fried's Communication

Temporary Restrictions Imposed

A U.S. judge has temporarily barred Sam Bankman-Fried, founder of FTX, from contacting current or former employees of the cryptocurrency exchange and his Alameda Research hedge fund. Additionally, he is restricted from using encrypted messaging tools such as Signal. This decision follows concerns by federal prosecutors in Manhattan that Bankman-Fried might tamper with witnesses or destroy evidence related to his criminal fraud case.

Background of the Case

Sam Bankman-Fried was arrested in December on charges of misappropriating billions from FTX customer funds and deceiving investors and lenders. Recent developments in the case include a Signal message sent by Bankman-Fried to the general counsel of FTX's U.S. affiliate, suggesting a phone call to "have a constructive relationship" or "vet things with each other."

Legal Proceedings and Reactions

Currently under house arrest at his parents' home in California, Bankman-Fried has pleaded not guilty. His lawyers argue that his communications were intended to offer assistance, not interfere. However, the presiding judge, Lewis Kaplan, expressed skepticism, suggesting that the message might be an attempt to coordinate statements with the witness.

Future Hearings and Conditions

The restrictions will remain in effect until at least February 7, when a hearing will take place to discuss the arguments from both sides. Notably, the order allows Bankman-Fried to communicate with his immediate family and FTX or Alameda employees if legal counsel is present. The upcoming hearing will also address a request by Bankman-Fried's legal team to permit him to access and transfer cryptocurrency.