As a condition of his release from federal custody, the federal court who is presiding over the criminal case against Sam Bankman-Fried, the former chief executive officer of FTX, has ruled that he is not allowed to have any contact with the present or former workers of the exchange.
In a ruling issued on February 1, 2019, Judge Lewis Kaplan of the Southern District of New York stated that in order for Bankman-Fried to remain free on bail until the conclusion of his trial, he was to be prohibited from communicating with current or former employees of FTX or Alameda Research “except in the presence of counsel.” As part of his ruling, Kaplan added that SBF was not allowed to communicate with anyone using encrypted messaging applications such as Signal. Earlier filings made by the prosecution stated that the former CEO of FTX had used the app to communicate with the current general counsel of FTX US, Ryne Miller. Kaplan’s ruling prohibits SBF from communicating with anyone using such applications.
“The undisputed information that is available to the Court regarding the ‘nature and seriousness of the danger posed by [defendant’s continued] release’ on the existing conditions has changed substantially since he was released, and there appears to be a material threat of inappropriate contact with prospective witnesses,” said Kaplan. “The information has changed substantially since he was released, and there appears to be a material threat of inappropriate contact with prospective witnesses,” said Kaplan. “The Court concludes that this danger is obviously and persuasively sufficient to support the imposition of additional restrictions awaiting the entire argument of the cross-applications,” which was originally written as “that risk is clearly sufficient to warrant the imposition of further conditions.”
According to Kaplan, SBF was the driving force behind the decisions to delete all Slack and Signal communications between employees of FTX and Alameda beginning in 2021. SBF allegedly told the former CEO of Alameda that any potential legal case would be more difficult to build without proper documentation. In his judgement, he also referenced the Signal communications he had with Miller and other techniques for getting in touch with “other present and former FTX workers.”
The court has not yet made a decision about whether or not SBF would also be prohibited from accessing funds from FTX and Alameda as part of the terms of his release. In a document submitted on January 30, the Department of Justice alleged that Bankman-Fried had contacted FTX CEO John Ray to explore potential avenues for gaining access to the company’s money. A hearing on the subject is scheduled to take place on February 7, and Judge Kaplan has said that he will attend.
The trial of Bankman-Fried is set to get underway in October at the United States District Court for the Southern District of New York, where he is being prosecuted on eight felony charges, one of which is wire fraud. The bankruptcy proceeding for FTX is also now ongoing in the District of Delaware, where the debtors have recently sought subpoenas for information and documents from SBF’s family members.