On Thursday, February 16, founder of FTX Sam Bankman Fried had to return to Manhattan federal court in New York for the second time in two weeks to explain in court why he continues to use the internet illegally while on bail. Bankman-Fried currently lives at his parents’ home in Palo Alto, California, awaiting and preparing for his upcoming trial in October. Bankman-Fried’s illegal digital behavior could now affect his bail as the government appears to have been unable to monitor all of his online movements.
A federal judge on Thursday showed growing impatience over the FTX founder’s continued use of the internet despite an earlier warning, suggesting that incarceration may ultimately be the only and most effective way to prevent him from communicating through electronic devices.
Judge Lewis A. Kaplan did not change the $250 million bail package that is in effect so far, but he did suggest the possibility that jail time is the only way to ensure that Bankman-Fried will not outwit the government with ways to use electronic devices in ways that are untraceable.
Kaplan noted that there may be too many devices in the Bankman-Fried family home that the government is not aware of. And he asked prosecutors why he was “asked to let him loose in this garden of electronic devices?” Kaplan alluded to an allegation by prosecutors that Bankman-Fried sent an encrypted message via the Signal texting app to general counsel on Jan. 15 FTX US.
According to prosecutors, the message read: “I would very much like to reconnect and see if there is any way we can have a constructive relationship, use each other as resources where possible, or at least explore things with each other. I would like to call soon to have a chat.”
Federal prosecutors have told Kaplan that Bankman-Fried’s communications indicate he may be trying to influence a witness with incriminating evidence against him.
Instead of immediate incarceration, prosecutors have now asked Kaplan to try to limit Bankman-Fried’s use of electronic devices and the Internet, to keep him away from things like messaging applications. They requested that a device monitoring program be installed on his mobile phone and computer.
US Assistant Attorney Nicolas Roos said it would be a “drastic alternative” to ban Bankman-Fried’s use of all electronic devices, also adding that it would be very difficult for Bankman-Fried to to prepare for a trial scheduled for October. , if that were to happen.
The court described Bankman-Fried as “a technologically advanced individual, with both the ability and the inclination to seek solutions to tighter bail conditions.”
Bankman-Fried has been under house arrest and electronic surveillance at his parents’ California home since last December following his arrest in the Bahamas. He is there on charges of defrauding investors and diverting their deposits to fill financial gaps at Bankman-Fried’s other company, Alameda Research. So far he has pleaded not guilty.