The bond agreement may soon be revised if US District Judge Lewis Kaplan accepts the filing submitted by Federal prosecutors, who have sought to restrict the reach of Sam Bankman-Fried. Federal prosecutors claim that Bankman-Fried is attempting to contact FTX counsel with the intention of tampering with witnesses.
The fresh filing seeks to prohibit Bankman-Fried from communicating with current or former employees of FTX and Alameda Research without the approval of lawyers.
According to the argument put forward by the federal prosecutors, Bankman-Fried is sending encrypted messages to potential witnesses through Singal and email. The last attempt was allegedly done on January 15, 2023, with Ryne Miller, the current counsel of FTX, who has been labeled “Witness-1.” According to the message, he would like to reconnect in order to develop constructive leadership and use each other’s resources or, at the very least, vet things with each other.
Usage of vet things, as claimed by federal prosecutors, suggests that Sam is looking to influence the testimony of potential witnesses.
This is not an uncommon pre-trial restriction. If imposed, it could very well prevent obstruction of justice. Caroline Elison, the Chief Executive Officer of Alameda, has admitted that Sam is aware of the ramifications of the automatic deletion of messages on Signal and other similar platforms. Caroline has already pleaded guilty to financial crimes and has committed to offering all the support needed for the investigation.
The filing has been objected to by the lawyers for Sam Bankman-Fried, who noted that the restriction is simply unworkable. Sam’s lawyers have quoted an example, saying that imposing such a restriction would prevent Bankman-Fried from contacting his therapist, who is a former employee of FTX.
Sam’s lawyers have, however, proposed that the restriction can be imposed by limiting him to contacting select current and former employees of FTX and Alameda Research. These names could include Zixiao Gary Chang, Ellison, and Nishad Singh, to mention a few.
Sam’s lawyers emphasized that the attempt to contact an FTX employee does not necessarily indicate misconduct, adding that it was merely an offer to assist the company during its bankruptcy process.
Sam Bankman-Fried had earlier been restricted from transferring funds related to FTX or Alameda Research by modifying the bond agreement. So, this would be the second modification to the bond agreement by US District Judge Lewis Kaplan.
Lawyers on Sam’s side have also justified his sending messages and emails by saying that he has turned off the “disappearing messages” function and is not sending any messages by enabling that feature on Signal or any other messaging platform.
FTX, once a top crypto exchange platform, is now facing a liquidity crisis after filing for bankruptcy in November 2022. This has affected the crypto industry on a macro level, with several platforms feeling the effects of its downfall.