US prosecutors have requested a New York choose to forestall Sam Bankman-Fried from contacting his former FTX colleagues and from utilizing encrypted messaging apps, claiming the crypto firm founder communicated with potential witnesses in his looming felony trial.
In a letter despatched to the court docket on Friday, the federal government alleged Bankman-Fried had been “in direct communication” over the Sign messaging app with the overall counsel of the bankrupt cryptocurrency trade, who is likely to be requested to take the stand within the case towards his former boss.
The letter didn’t identify the overall counsel, however the function is occupied by former Sullivan & Cromwell lawyer Ryne Miller, who joined FTX US in 2021.
Bankman-Fried has claimed Miller and Sullivan & Cromwell compelled him into submitting for chapter, which they deny. The regulation agency had labored for FTX and has since been retained as its predominant counsel in chapter.
Bankman-Fried wrote in a weblog on January 12: “S&C and [Miller] had been the first events strong-arming and threatening me into naming the candidate they themselves selected as CEO of FTX — together with for a solvent entity in FTX US — who then filed for Chapter 11 and selected S&C as counsel to the debtor entities.”
The federal government on Friday mentioned Bankman-Fried, who was launched on bail in December after being extradited from the Bahamas to face eight felony fees within the US, contacted the FTX common counsel on January 15 by way of the Sign app, in addition to by e mail.
Prosecutors allege he wrote: “I might actually like to reconnect and see if there’s a approach for us to have a constructive relationship, use one another as sources when attainable, or no less than vet issues with one another” and contacted different former and present FTX workers.
Assistant US legal professional Danielle Sassoon on Friday mentioned: “The defendant’s request to ‘vet issues with one another’ is suggestive of an effort to affect Witness-1’s potential testimony, and the attraction for a ‘constructive relationship’ likewise implies that Witness-1 ought to align with the defendant.”
Sassoon added the federal government has already interviewed the overall counsel of FTX, “who has first-hand data of the defendant’s conduct”.
Sassoon mentioned Bankman-Fried had been in touch with FTX’s common counsel within the lead-up to the corporate’s collapse in November, ordering the liquidation of investments in FTX’s buying and selling arm Alameda to permit clients of the trade to make withdrawals.
She additionally requested choose Lewis Kaplan to amend Bankman-Fried’s bail circumstances to ban him from utilizing encrypted or ephemeral messaging platforms together with Sign. She claimed the defendant had used such apps to hide communications from regulation enforcement, and set messages on Sign and Slack to vanish after 30 days whereas at FTX.
The federal government mentioned it realized from former Alameda boss Caroline Ellison, who reached a plea settlement with prosecutors final month and is anticipated to testify towards Bankman-Fried, that the previous FTX boss had chosen to set his communications to auto delete as a result of he understood that the knowledge could possibly be utilized in a authorized case.
The auto deletion of FTX and Alameda’s Slack and Sign communications had “impeded the federal government’s investigation”, Sassoon mentioned.
A consultant for Bankman-Fried and a lawyer for Miller declined to remark.
