Federal prosecutors say FTX founder Sam Bankman-Fried contacted the crypto trading platform’s former general counsel earlier this month in a move they say may constitute tampering of witnesses.
A Bankman-Fried spokesperson declined to comment.
Prosecutors from the U.S. Attorney’s Office for the Southern District of New York asked the judge to change Bankman-Fried’s bail conditions to prohibit him from communicating with current or former employees of FTX or his fund. speculative sister Alameda Research, unless he is with his lawyer or has government approval. They also want the judge to stop Bankman-Fried from using any encrypted communication devices for fear it will hamper the ongoing investigation.
Prosecutors said in a letter to the judge that Bankman-Fried contacted FTX’s former general counsel on January 15 using Signal and via email – saying: ‘I would really like to reconnect and see if there is a way for us to have a constructive relationship, use each other as resources when possible, or at least fat things with each other.
This contact, according to prosecutors, suggests witness tampering since the former attorney general, identified as “witness-1”, could testify against Bankman-Fried at trial.
“Efforts by the defendant to improve his relationship with potential witnesses who may testify against him may themselves constitute witness tampering,” prosecutors wrote.
“The government interviewed Witness-1, who has direct knowledge of the conduct of the Defendant during the indicted conspiracies, including during the collapse of FTX in November 2022. Witness-1 participated in Signal Communications and Slack with Defendant and a small group of business insiders during the relevant events of November 2022. In these messages, among other things, Defendant gave instructions to liquidate Alameda’s investments to satisfy FTX client withdrawals , and indicated that he transferred approximately $45 million in funds from Alameda to FTX US to fill an apparent hole in FTX US’s balance sheet,” prosecutors said.
Prosecutors said it is likely that numerous current and former employees of FTX and Alameda will be witnesses at trial, adding that their investigation is ongoing and they are still in the process of identifying potential witnesses.
In addition to limiting Bankman-Fried’s contact with former colleagues, prosecutors want to restrict his use of Signal and Slack, messaging apps that allow users to automatically delete messages after a certain amount of time.
Prosecutors say Caroline Ellison, the former Alameda chief executive who pleaded guilty and is cooperating, informed them that Bankman-Fried indicated “a lot of court cases revolve around documentation and it’s harder to build a legal case if the information is not written down or kept.”
Authorities said the lack of Slack and Signal communications had already “hampered” its investigation. Several potential witnesses told prosecutors of “incriminating conversations” they had with Bankman-Fried on messaging platforms that were taken down because Bankman-Fried had set up automatic removal of programs after 30 days.