SBF Barred from All Communication with Former & Current FTX Employees

UTC by Tolu Ajiboye · 3 min read
SBF Barred from All Communication with Former & Current FTX Employees
Photo: Unsplash

A court has stopped SBF from initiating communication with ‘potential witnesses’ following reports that he contacted some FTX employees. 

A US district court has barred Sam Bankman-Fried (SBF) from contacting FTX or Alameda employees via encrypted communication. On Wednesday, US District Judge Lewis Kaplan made the ruling after the embattled ex-FTX CEO attempted to go over things with a potential witness.

According to reports, SBF recently contacted a potential witness via encrypted means to establish a more favorable relationship. In addition, prosecutors allege that the disgraced former FTX CEO attempted to contact FTX US’ current general counsel through the encrypted messaging platform, Signal. According to the prosecuting team, SBF wrote via Signal and email:

“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.”

In the prosecuting team’s opinion, SBF’s gestures of reaching out to potential witnesses could influence subsequent testimonies. The plaintiffs submitted a filing calling for SBF to stop reaching out to current or former employees of FTX and sister firm Alameda Research. Furthermore, prosecutors also offered a proviso that allows SBF to make any mandatory contacts in the presence of a lawyer. The filing shows that the SBF development is not an uncommon pre-trial restriction.

Prosecutors also asked the presiding judge to ban Bankman-Fried from using encrypted calls or messaging applications. They opine that banning the embattled former crypto leader from using encrypted communication channels would negate obstruction of justice.

SBF Lawyers Counter Prosecutor Arguments Regarding Communication with Employees

SBF’s legal team initially countered prosecutors ‘witness tampering’ arguments against the former FTX chief executive. On Saturday, the defendant’s lawyers submitted a letter opposing the prosecutors’ request and questioning its practicality. The letter read:

“The Government’s proposal that Mr. Bankman-Fried be barred from any contact with former or current FTX employees without counsel present is simply unworkable. For example, it would mean that Mr. Bankman-Fried could not speak to his therapist, who is a former FTX employee, without the participation of his lawyers.”

The defendant’s legal team also outlined its version of restrictions that could be servable to Bankman-Fried instead. Calling prosecutors’ conditions overboard, the defending lawyers instead proposed restricting SBF communications to some former and current employees of his two companies. These include former Alameda Research CEO Caroline Ellison, former FTX director of engineering Nishad Singh, and former FTX chief technology officer “Gary” Wang.

Among other proposed stipulations, SBF’s legal team also called for removing his bail condition, barring him from transferring FTX or Alameda-linked funds. According to the lawyers, the basis for seeking that condition is yet to receive any support nearly three weeks later.

SBF Woes

Sam Bankman-Fried was arrested in the Bahamas on December 12th, one month after FTX filed for bankruptcy. He was subsequently extradited to the US and charged with eight financial crimes related to the exchange’s collapse. However, on January 3rd, SBF pleaded not guilty to all charges, including misappropriation of customers’ funds, and awaits an October trial.

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