It seems the fidget-spinning founder of FTX, Sam Bankman-Fried, may be doing more than chilling at his parents as he awaits trial on two counts of wire fraud and six counts of conspiracy-related charges. According to the Department of Justice (DOJ), he may be tampering with witnesses.
On Friday, Damian Williams, the U.S. attorney for the Southern District of New York, asked the Honorable Lewis A. Kaplan to “impose two new conditions relating to his contact with prospective witnesses in the case.”
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“Specifically,” Williams wrote, “the Government respectfully requests that the Court impose the following conditions: (1) 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 no-contact rule; and (2) the defendant shall not use any encrypted or ephemeral call or messaging application, including but not limited to Signal.”
The revision request comes after Bankman-Fried reached out to “the current General Counsel of FTX US who may be a witness at trial (‘Witness 1’), and who is represented by counsel.”
On January 15, the letter states, Bankman-Fried used Signal and email to write to the potential witness, whom the DOJ says “has firsthand knowledge of the defendant’s conduct during the charged conspiracies, including during the collapse of FTX in November 2022” and “has information that would tend to inculpate the defendant.”
“I would 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,” Bankman-Fried wrote.
“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,” argued Williams.
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“Were the defendant to ‘vet’ his version of relevant events with potential witnesses, that might have the effect of discouraging witnesses from testifying in a manner contrary to the defendant’s narrative,” he stated.
As it is likely that “many FTX and Alameda current and former employees will be witnesses at trial,” the Government “is seeking to limit the defendant’s contact only with current and former FTX and Alameda employees, the very people who until recently were the defendant’s underlings whom he supervised and financially compensated, and who are therefore most vulnerable to intimidation.”
Additionally, the DOJ wants to prohibit Bankman-Fried from using encrypted and ephemeral call and messaging apps like Slack and Signal.
“Because Signal and similar messaging platforms are encrypted and the messages may be set to autodelete after a short period of time,” explained Williams, “defendants can also use them to evade bail restrictions and pretrial oversight.”
“The proposed bail conditions in combination,” Williams wrote, “would more effectively prevent the defendant from obstructing justice.”
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