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US prosecutors have requested a New York choose to forestall Sam Bankman-Fried from contacting his former FTX colleagues and from utilizing encrypted messaging apps, claiming the crypto firm founder communicated with potential witnesses in his looming prison trial.
In a letter despatched to the court docket on Friday, the federal government alleged Bankman-Fried had been “in direct communication” over the Sign messaging app with the overall counsel of the bankrupt cryptocurrency trade, who may be requested to take the stand within the case in opposition to his former boss.
The letter didn’t title the overall counsel, however the position is occupied by former Sullivan & Cromwell lawyer Ryne Miller, who joined FTX US in 2021.
Bankman-Fried has claimed Miller and Sullivan & Cromwell pressured him into submitting for chapter, which they deny. The regulation agency had labored for FTX and has since been retained as its major counsel in chapter.
Bankman-Fried wrote in a weblog on January 12: “S&C and [Miller] had been the first events strong-arming and threatening me into naming the candidate they themselves selected as CEO of FTX — together with for a solvent entity in FTX US — who then filed for Chapter 11 and selected S&C as counsel to the debtor entities.”
The federal government on Friday mentioned Bankman-Fried, who was launched on bail in December after being extradited from the Bahamas to face eight prison prices within the US, contacted the FTX common counsel on January 15 by way of the Sign app, in addition to by e-mail.
Prosecutors allege he wrote: “I might actually like to reconnect and see if there’s a means for us to have a constructive relationship, use one another as assets when attainable, or a minimum of vet issues with one another” and contacted different former and present FTX workers.
Assistant US legal professional Danielle Sassoon on Friday mentioned: “The defendant’s request to ‘vet issues with one another’ is suggestive of an effort to affect Witness-1’s potential testimony, and the attraction for a ‘constructive relationship’ likewise implies that Witness-1 ought to align with the defendant.”
Sassoon added the federal government has already interviewed the overall counsel of FTX, “who has first-hand data of the defendant’s conduct”.
Sassoon mentioned Bankman-Fried had been involved with FTX’s common counsel within the lead-up to the corporate’s collapse in November, ordering the liquidation of investments in FTX’s buying and selling affiliate Alameda to permit clients of the trade to make withdrawals.
She additionally requested choose Lewis Kaplan to amend Bankman-Fried’s bail situations to ban him from utilizing encrypted or ephemeral messaging platforms together with Sign. She claimed the defendant had used such apps to hide communications from regulation enforcement, and set messages on Sign and Slack to vanish after 30 days whereas at FTX.
The federal government mentioned it realized from former Alameda boss Caroline Ellison, who reached a plea settlement with prosecutors final month and is anticipated to testify in opposition to Bankman-Fried, that the previous FTX boss had chosen to set his communications to auto delete as a result of he understood that the knowledge may very well be utilized in a authorized case.
The auto deletion of FTX and Alameda’s Slack and Sign communications had “impeded the federal government’s investigation”, Sassoon mentioned.
A lawyer for Miller declined to remark. On Saturday, attorneys for Bankman-Fried informed the court docket that the federal government had tried to painting their shopper “within the worst attainable gentle”, and objected to prosecutors’ characterisation of the defendant’s communications. Choose Kaplan ordered the complete interplay to be filed to the court docket.
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