Former FTX CEO Sam Bankman-Fried Accused Of Witness Tampering, Prosecutors Seek Stricter Bail Conditions

Zinger Key Points
  • In 2021, Bankman-Fried, as CEO of FTX, directed that many Signal and Slack communications be autodeleted.
  • Bankman-Fried has pleaded not guilty to money laundering and fraud charges, and his trial is scheduled to begin in October.
Former FTX CEO Sam Bankman-Fried Accused Of Witness Tampering, Prosecutors Seek Stricter Bail Conditions

Federal prosecutors have asked a Manhattan judge to impose stricter bail conditions on former FTX FTT/USD CEO Sam Bankman-Fried, due to his attempts to contact a prospective witness in the ongoing investigation against him.

Prosecutors have asked U.S. District Judge Lewis Kaplan to block Bankman-Fried from using any encrypted communication devices or messaging applications, saying he may obstruct the ongoing investigation, reports Reuters. The request includes restricting him from communicating with current or former employees of FTX, or his Alameda Research hedge fund, other than family unless his attorney is present.

According to the court filing, prosecutors have cited a Signal message on Jan. 15 from Bankman-Fried to "Witness-1," the general counsel of the FTX U.S. affiliate. Bankman-Fried expressed interest in having a "constructive relationship" or "at least vet things with each other."

"The defendant's request to 'vet things with each other' is suggestive of an effort to influence Witness-1's potential testimony, and the appeal for a 'constructive relationship' likewise implies that Witness-1 should align with the defendant," prosecutors said in the filing.

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"Even if the defendant has not directly attempted to tamper with witnesses, his contact with witnesses may intimidate them" into not coming forward or testifying, prosecutors added.

In 2021, Bankman-Fried, as CEO of FTX at the time, directed that many Signal and Slack communications be autodeleted within 30 days.

According to the prosecutors, former Alameda chief Caroline Ellison has told them that Bankman-Fried had indicated it could be harder to build legal cases if information were not preserved.

Bankman-Fried returned to the U.S. from the Bahamas on Dec. 21, 2022, and was released on a $250 million recognizance bond secured by his family home in California the following day.

Bankman-Fried has pleaded not guilty to money laundering and fraud charges, and his trial is scheduled to begin in October.

Last week, prosecutors seized nearly $700 million in assets from Bankman-Fried, mainly Robinhood stock.  

The vast majority of the value of the seized assets came from the Robinhood shares purchased by Bankman-Fried, which gave him a 7.6% stake in the company. 

Bankman-Fried is accused of misappropriating multiple billions of dollars from investors and using customer funds to purchase personal properties and backstop trades at his hedge fund, Alameda Research, and fund extensive political donations.

Photo: Courtesy of shutterstock.com

Posted In: CryptocurrencyNewsTop StoriesMarketsFTXinvestigationprosecutorSam Bankman-FriedUS

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