A US judge has, for the moment, sided with the US government and imposed further restrictions on former FTX CEO Sam Bankman-Fried’s bail after he sent a message to a government witness who is also a former employee of his cryptocurrency exchange.
“While defendant’s counsel seeks to have the court interpret that message in a benign way, that does not appear, on a preliminary basis, to be a persuasive reading,” Kaplan said in his February 1 order on the matter.
“The message is addressed to Witness 1 and seeks a reconciliation of an apparently damaged personal relationship.
“It invites a constructive repaired relationship. It proposes that the defendant and Witness 1 vet things with each other.
“Subject to hearing counsel’s argument, the message in its entirety seems to be an invitation for Witness 1 to align his views and recollections with defendant’s version of events and thus make their relationship constructive.
“In perhaps more colloquial terms, it appears to have been an effort to have both the defendant and Witness 1 sing out of the same hymn book.
“A possible motive for such an attempt is evident from the fact that Witness 1 undisputedly was a witness to some events likely to be at issue in this case, and defendant is facing the possibility of a long prison term.
“Coupled with the apparently most plausible reading of the communication to Witness 1, the directions to employees to use Slack and Signal, the statement to Ms. [Caroline] Ellison referred to above, and the fact that defendant’s message to Witness 1 invited a telephonic rather than written response, the question arises whether further measures now should be imposed to assure the safety of the community from efforts by this defendant to influence or tamper with prospective witnesses.”
Kaplan said he will hear oral arguments on the issue on February 7.
In the meantime, pending the outcome of that hearing, he amended the conditions of Bankman-Fried’s bail.
“… The defendant shall not contact or communicate with current or former employees of FTX or Alameda (other than immediate family members) except in the presence of counsel, unless the government or court exempts an individual from this rule and (2) the defendant shall not use any encrypted or ephemeral call or messaging application, including but not limited to Signal,” he said.
Bankman-Fried, who is on $250 million bond, is accused of stealing billions of dollars from customers of his cryptocurrency exchange.
He has pleaded not guilty to charges.
US Attorney in the Southern District of New York Damian Williams asked the court to impose the restrictions on Bankman-Fried’s bail.
As part of his letter asking for the restrictions, Williams attached a text message, dated January 15, 2023, that Bankman-Fried sent to Witness 1 via Signal.
It read, “Hey, I know it’s been a while since we’ve talked. And I know things have ended up on the wrong foot. I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other. I’d love to get on a phone call sometime soon and chat. Sam.”
He sent the same message via email to Witness 1 as well, Williams wrote.
However, Bankman-Fried’s attorney argued that the message that Bankman-Fried sent to Witness 1 via Signal and email “does not justify the overboard restriction the government seeks”.
“As explained above, Mr. Bankman-Fried’s message to Witness 1 was merely an innocuous attempt to offer assistance in FTX’s bankruptcy process and does not reflect misconduct that warrants the restriction the government proposes here,” Mark Cohen said.