Among the latest news surrounding FTX are federal prosecutors who are growing weary of Sam Bankman Fried‘s attempts to find witnesses in the affair.
The request stems from the claim that the former CEO attempted to “manipulate” a witness by sending coded messages. Thus, prosecutors submitted a request to the judge urging Sam Bankman Fried to change his conduct.
Latest news about Sam Bankman Fried’s communications to FTX exchange employees
The conduct of the former FTX CEO is not sitting well with district prosecutors, so they have asked the judge in the case for the necessary measures. It all starts with Ryne Miller, who currently holds the position of general counsel of FTX US.
There is talk of an attempt to contact him by Sam Bankman Fried, via the Signal app. But not only that, apparently the former CEO tried to contact and influence several employees (or former employees) by making requests regarding his case.
The federal prosecutors’ request to block communications does not stop at messages via Signal, but all messaging and calling apps. The judge could easily accept the request, because it is not unusual before a trial, but especially given the precedents mentioned above.
The purpose is very clear, to ban Sam Bankman Fried from any kind of contact via communication channels would prevent a possible obstruction of justice.
The former CEO of Alameda Research, Caroline Ellison, also stated that Sam Bankman Fried was quite aware of the automatic deletion of messages on platforms such as Signal. Therefore, SBF’s former right-hand man, implicitly disclosed that it would not be surprising for him to attempt encrypted communication.
SBF revealed to Caroline Ellison, who in turn reported to prosecutors:
“Many legal cases are about documentation, and it is more difficult to build a legal case if information is not written down or preserved.”
This is not the first time the prosecuting parties have attempted to amend Sam Bankman Fried’s bond agreement. In fact, the former CEO has already been barred from accessing funds related to FTX and Alameda Research.
SBF lawyers disagree with federal prosecutors’ request
Lawyers for the disgraced former CEO do not seem to agree much with the prosecution’s request. In fact, they submitted a letter to the judge, explaining their disagreement and strongly opposing the federal prosecutors’ request.
In the letter, it is explained why according to the former CEO’s defense, the measures should not be applied.
Sam Bankman Fried’s lawyers justified themselves:
“The government’s proposal to prevent Mr. Bankman-Fried from any contact with former or current FTX employees without the presence of a lawyer is simply unworkable. For example, it would mean that Mr. Bankman-Fried could not talk to his therapist, who is a former FTX employee, without the participation of his lawyers.”
The restrictions have been called “exaggerated,” and the defense lawyers’ counterproposal, is to limit contact with specific people. Specifically, the lawyers have named former and current employees of FTX and Alameda Research, such as Caroline Ellison, Zixiao “Gary” Wang and Nishad Singh, as well as other individuals who have been specified.
SBF’s legal team also justified the evidence presented by federal authorities, explaining the reason for Bankman Fried’s communication.
Indeed, the attempt to contact the former employee was simply an “innocuous” message with the purpose of offering assistance in the FTX bankruptcy process. This means that it does not at all reflect misconduct on the part of the former CEO of FTX.
In addition, the messages did not have an automatic deletion feature, so there was no intent by SBF to delete or hide the messages.
Bankman-Fried’s lawyers later argued:
“In fact, Mr. Bankman-Fried has disabled the disappearing message feature on his Signal account and is not sending any Signal or Slack messages with auto-delete functionality.”
At the time to accept the request made by federal authorities, the Judge requested a complete copy of the messages and alleged communications between Ryne Miller and Sam Bankman Fried:
“I’d really like 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 check things out with each other.”
We will see how the matter develops and whether Sam Bankman Fried’s conduct will be deemed unlawful. At the moment, everything is in the hands of the judge who will have to decide whether to enforce the restrictions or not.