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FTX’s Sam Bankman-Fried and DOJ fight over his communications

Michael Riedtke

Federal prosecutors are seeking to ban FTX founder Sam Bankman-Fried from personally contacting current and former employees of the bankrupt cryptocurrency exchange.

The demands, made in a letter filed by U.S. Justice Department attorneys late Friday, twist facts to cast the FTX founder in an ominous light ahead of his trial, which is scheduled for later this year, prosecutors said. It provoked an indignant reaction from Bankman-Fried’s lawyers, who accused the officials of…

The heated exchange prompted U.S. District Judge Louis Kaplan in New York to issue an order Saturday that included warning the opposing attorneys to refrain from “derogatory characterization” of each other’s actions and motives. It contained the content to

Bankman-Fried, 30, is locked up in his parents’ home in Palo Alto, California. He is accused of diverting large sums of FTX client money to buy assets, donate to politicians, and fund risky trades at his crypto hedge fund trading firm, Alameda Research. I’m here.

Federal prosecutors are concerned Bankman-Fried attempted to hook up with potential witnesses to incident after discovering he sent encrypted message to FTX US general counsel on Jan. 15 expressed.

Bankman-Fried told FTX general counsel, “There are ways to reconnect and build constructive relationships, use each other as resources if possible, or at least take stock of each other. I would like to check whether “Witness 1” in the prosecutor’s letter.

Federal prosecutors told Kaplan that the Bankman-Fried correspondence was a sign that Bankman-Fried was trying to influence witnesses with incriminating evidence against him. , wishes to amend Bankman-Fried’s bail conditions to prevent him from communicating with current or former employees of FTX and Alameda Research in the presence of attorneys without a waiver from the Department of Justice.

But Bankman-Fried’s attorney, Mark Cohen, painted an entirely different picture in his vehement rebuttal to prosecutors. was described as a “harmless attempt to assist FTX in its bankruptcy process.”

In Saturday’s order, Kaplan required a full copy of Bankman-Fried’s electronic communications to be provided by Monday.

Federal prosecutors also want Kaplan to change Bankman-Fried’s bail terms to prevent him from communicating via Signal. Signal has an auto-delete option to quickly clear messages and encryption technology to protect your content from outsiders.

“Using Signal to contact potential witnesses is likely to thwart detection itself of attempts to influence witnesses to obstruct justice,” prosecutors told Kaplan. .

But Cohen wrote that the message sent to FTX’s general counsel did not have an auto-delete feature. I assure the officer.

“The government cannot justify bail conditions based on unsubstantiated concerns about what Mr. Bankman-Fried will do when there is no evidence that Mr. Bankman-Fried is actually doing so. ‘ said Cohen.

Before prosecutors asked the judge to impose sweeping restrictions barring Bankman-Fried from communicating personally with current or former FTX employees, Cohen said prosecutors had made the negotiations “sandboxed.” He said the two sides had already negotiated to reach a “reasonable” compromise before the “bag”. With a late Friday letter to Kaplan.

Cohen estimates that FTX and Alameda Research have about 350 current and former employees who will provide information critical to Bankman-Fried’s defense during the trial, which is tentatively scheduled to begin in October. A sweeping ban, including employees who may have

Bankman-Fried is allowed to remain in contact with others, such as his father, his therapist still employed at the cryptocurrency exchange, and various other unidentified workers, in exchange for Voluntarily agreed to bar contact with some FTX executives. who contact him directly.

Kaplan told federal prosecutors to respond to Cohen’s allegations with a seven-page letter by Monday.

https://www.eastbaytimes.com/2023/01/28/ftxs-sam-bankman-fried-doj-tussle-over-his-communications/ FTX’s Sam Bankman-Fried and DOJ fight over his communications

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