AP

Judge suggests jail to limit FTX founder’s communications

Feb 16, 2023, 2:19 PM | Updated: Feb 19, 2023, 12:37 pm

In this courtroom sketch, in federal court in New York, Thursday, Feb. 16, 2023, Judge Lewis Kaplan...

In this courtroom sketch, in federal court in New York, Thursday, Feb. 16, 2023, Judge Lewis Kaplan speaks from bench during the hearing of Samuel Bankman-Fried. Kaplan showed growing impatience Thursday with FTX founder Sam Bankman-Fried's use of the internet, suggesting that incarceration might eventually be the most effective way to prevent him from violating his bail conditions by communicating on electronic devices in ways that can't be traced. (AP Photo/Elizabeth Williams)

(AP Photo/Elizabeth Williams)

NEW YORK (AP) — A federal judge showed growing impatience Thursday with FTX founder Sam Bankman-Fried’s use of the internet while on bail, suggesting that incarceration might eventually be the most effective way to prevent him from communicating on electronic devices in ways that can’t be traced.

Judge Lewis A. Kaplan did not immediately change a $250 million bail package that lets Bankman-Fried live with his parents in Palo Alto, California, while preparing for trial on charges that he cheated investors and looted customer deposits at FTX, his cryptocurrency trading platform.

But he raised the possibility for the first time that jail might be the only way to ensure Bankman-Fried won’t outfox the government with ways to use electronic devices in ways that can’t be tracked.

“There is a solution, but it’s not one anybody’s proposed yet,” Kaplan said as Bankman-Fried sat passively at the defense table. He then noted that there may be many devices in Bankman-Fried’s family home that the government will not be tracking, even with any new rules imposed on his bail conditions.

“Why am I being asked to set him loose in this garden of electronic devices?” he asked prosecutors.

Assistant U.S. Attorney Nicolas Roos said a more “drastic alternative” would be to ban Bankman-Fried’s use of all electronic devices, but he added that it would be difficult for him to prepare for a trial tentatively set for October if that were to occur.

The judge noted that Bankman-Fried, according to prosecutors, “has done things that suggests to me that maybe he has committed or attempted to commit a federal felony while on release.”

Kaplan was alluding to a claim by prosecutors that Bankman-Fried sent an encrypted message over the Signal texting app on Jan. 15 to the general counsel of FTX US.

According to prosecutors, the message said: “I would really 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. I’d love to get on a phone call sometime soon and 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.

On Thursday, prosecutors asked Kaplan to more severely limit Bankman-Fried’s use of electronic devices and the internet, including banning him from messaging applications and requiring the installation of a device monitoring program on his cellphone and computer.

A day earlier, they wrote in court papers that his “behavior shows that the existing conditions leave too much room for circumvention of restrictions aimed at preventing inappropriate conduct, including contacting witnesses and accessing cryptocurrency assets.”

They described him as “a technologically sophisticated person with both the ability and the inclination to seek workarounds of more narrowly drawn bail conditions.”

Mark Cohen, Bankman-Fried lawyer, called the proposals by prosecutors “draconian” requests that would make it hard for lawyers and the defendant to prepare for trial. But he soon found himself on the defensive as Kaplan noted his client’s apparent bail violations, including accessing an encrypted internet site to watch the Super Bowl.

The judge mocked Bankman-Fried’s use of an encrypted method to watch the game, noting that it was on any television. Cohen responded that there wasn’t a TV in the house.

“I think we understand your comments today, your honor, that there is no margin for error,” Cohen said. “That if there are any violations, we will be at a very different proceeding.”

Of the eventual bail restrictions, the judge said: “I want this to be tight, not just tight in characterization, but tight in fact.”

Bankman-Fried has been confined with electronic monitoring to his parents’ home since his December arrest on charges that he cheated investors and that diverted their deposits, in part to finance political donations and make risky trades at Alameda Research. He has pleaded not guilty.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Most Americans are sleepy new Gallup poll finds...

Associated Press

Most Americans say they don’t get enough sleep, according to new Gallup poll

A new Gallup poll found that most Americans are sleepy — or, at least, they say they are. Multiple factors play into this.

10 hours ago

Near-total abortion ban in Arizona dates back to Civil War era...

Associated Press

Near-total abortion ban dates back to 1864, during the Civil War, before Arizona was a state

The near-total abortion ban resurrected last week by the Arizona Supreme Court dates to 1864, when settlers were encroaching on tribal lands.

11 hours ago

Tracy Toulou...

Associated Press

How to tackle crime in Indian Country? Empower tribal justice, ex-Justice Department official says

A recently retired director of the Justice Dept. says the federal government hasn't given tribal justice systems equal recognition.

1 day ago

Speaker of the House Mike Johnson...

Associated Press

House Speaker Mike Johnson says he will push for aid to Israel and Ukraine this week

House Speaker Mike Johnson said Sunday he will try to advance wartime aid for Israel this week, along with funding for Ukraine.

1 day ago

President Joe Biden speaks at a campaign rally Saturday, March 9, 2024, at Pullman Yards in Atlanta...

Associated Press

US shoots down ‘nearly all’ Iran-launched attack drones as Biden vows support for Israel’s defense

Joe Biden cut short a weekend stay at his beach house to meet with his national security team as Iran launched an attack against Israel.

3 days ago

Follow @ktar923...

Sponsored Content by Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

Sponsored Articles

...

COLLINS COMFORT MASTERS

Here are 5 things Arizona residents need to know about their HVAC system

It's warming back up in the Valley, which means it's time to think about your air conditioning system's preparedness for summer.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

Judge suggests jail to limit FTX founder’s communications