by
CNN
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Federal prosecutors stated FTX founder Sam Bankman-Fried contacted the previous normal counsel of the crypto buying and selling platform earlier this month in a transfer they say might represent witness tampering.
A spokesperson for Bankman-Fried declined to remark.
Prosecutors with the US legal professional’s workplace for the Southern District of New York requested the decide to amend Bankman-Fried’s bail situations to ban him from speaking with present or former workers of FTX or its sister hedge fund Alameda analysis until he is with his legal professional or has approval from the federal government. They additionally need the decide to dam Bankman-Fried from utilizing any encrypted communication units out of considerations he’ll hinder the continued investigation.
Prosecutors stated in a letter to the decide that Bankman-Fried contacted the previous normal counsel of FTX on January 15 utilizing Signal and e-mail — stating, “I might actually like to reconnect and see if there’s a method for us to have a constructive relationship, use one another as sources when attainable, or no less than vet issues with one another.”
That contact, prosecutors stated, is suggestive of witness tampering because the ex-general counsel, who is recognized as “Witness-1,” might testify in opposition to Bankman-Fried at trial.
“Efforts by the defendant to enhance his relationship with potential witnesses that will testify in opposition to him might itself represent witness tampering,” prosecutors wrote.
“The Government has interviewed Witness-1, who has firsthand data of the defendant’s conduct throughout the charged conspiracies, together with throughout the collapse of FTX in November 2022. Witness-1 participated in Signal and Slack communications with the defendant and a small group of firm insiders throughout the related occasions of November 2022. In these messages, amongst different issues, the defendant gave directions for liquidating Alameda’s investments to fulfill FTX buyer withdrawals, and indicated that he transferred roughly $45 million {dollars} of Alameda funds to FTX US to fill an obvious gap in FTX US’s steadiness sheet,” prosecutors stated.
Prosecutors stated it’s probably that many of FTX and Alameda’s present and former workers will probably be witnesses on the trial, including that their investigation is ongoing and they’re nonetheless figuring out potential witnesses.
In addition to limiting Bankman-Fried’s contact with former colleagues, prosecutors need to limit his use of Signal and Slack, messaging apps that allow customers to auto-delete messages after a sure time interval.
Prosecutors say Caroline Ellison, the previous chief govt of Alameda who pleaded responsible and is cooperating, knowledgeable them that Bankman-Fried indicated “that many authorized circumstances activate documentation and it is tougher to construct a authorized case if data is not written down or preserved.”
Authorities stated the dearth of Slack and Signal communications has already “impeded” its investigation. Several potential witnesses informed prosecutors of “incriminating conversations” that they had with Bankman-Fried over the messaging platforms that had been deleted as a result of Bankman-Fried set the packages to auto-delete after 30 days.
