Tag: sam bankman-fried

Sam Bankman-Fried Sentenced to 25 Years for Multi-Billion Dollar FTX Fraud

Sam Bankman-Fried was sentenced to 25 years in prison by a judge on Thursday for stealing $8 billion (roughly Rs. 66,678 crore) from customers of the now-bankrupt FTX cryptocurrency exchange he founded, the last step in the former billionaire wunderkind’s dramatic downfall.

US District Judge Lewis Kaplan handed down the sentence at a Manhattan court hearing after rejecting Bankman-Fried’s claim that FTX customers did not actually lose money and finding that he lied during his trial testimony. A jury found Bankman-Fried, 32, guilty on November 2 on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse in what prosecutors have called one of the biggest financial frauds in US history.

Kaplan said Bankman-Fried has shown no remorse.

“He knew it was wrong,” Kaplan said. “He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right.”

Bankman-Fried, wearing a beige short-sleeve jail T-shirt, acknowledged during 20 minutes of remarks to the judge that FTX customers had suffered and he offered an apology to his former FTX colleagues – but did not admit criminal wrongdoing.

He has vowed to appeal his conviction and sentence.

Bankman-Fried stood with his hands clasped before him as Kaplan read the sentence. He then spoke with his defense lawyer Marc Mukasey briefly before being led out of the courtroom by members of the US Marshals Service.

The sentence marked the culmination of Bankman-Fried’s plunge from an ultra-wealthy entrepreneur and major political donor to the biggest trophy to date in a crackdown by US authorities on malfeasance in cryptocurrency markets.

“There are serious consequences for defrauding customers and investors,” US Attorney General Merrick Garland said in a statement. “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice.”

Kaplan found that FTX customers lost $8 billion, FTX’s equity investors lost $1.7 billion (roughly Rs. 14,169 crore), and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion (roughly Rs. 10,835 crore). He imposed an $11 billion (roughly Rs. 91,682 crore) forfeiture order and authorized the government to repay victims with seized assets.

Federal prosecutors had sought a sentence of 40 to 50 years. Mukasey had argued for a sentence of less than 5-1/4 years.

‘I’m sorry for that’

Addressing the judge, Bankman-Fried said, “Customers have been suffering … I didn’t at all mean to minimize that. I also think that’s something that was missing from what I’ve said over the course of this process, and I’m sorry for that.”

Referring to his FTX colleagues, Bankman-Fried added, “They put a lot of themselves into it, and I threw that all away. It haunts me every day.”

Three former close associates testified as prosecution witnesses that Bankman-Fried had directed them to use FTX customer funds to plug losses at Alameda Research. All three have pleaded guilty to fraud.

Kaplan said Bankman-Fried lied when testified that he did not know Alameda Research had spent customer deposits taken from FTX.

Mukasey sought to distance Bankman-Fried from notorious fraudsters like Bernie Madoff, saying he was “not a ruthless financial serial killer” but rather an “awkward math nerd” who tried to get customers their money back after FTX’s collapse.

“Sam Bankman-Fried doesn’t make decisions with malice in his heart,” Mukasey added. “He makes decisions with math in his head.”

Bankman-Fried’s eyes turned red as he appeared to hold back tears while Mukasey spoke.

His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing. Bankman held a green umbrella as they exited the courthouse into a rainy New York afternoon, their arms around each other.

“We are heartbroken and will continue to fight for our son,” they said in a statement.

‘Power and influence’

A Massachusetts Institute of Technology graduate, Bankman-Fried rode a boom in the values of bitcoin and other digital assets to a net worth of $26 billion (roughly Rs. 2,16,705 crore), according to Forbes magazine, before he turned 30.

Bankman-Fried became known for his mop of unkempt curly hair and commitment to a movement called effective altruism, which encourages talented young people to focus on earning money and giving it away to worthy causes.

He was one of the biggest contributors to Democratic candidates and causes before the 2022 US midterm elections. Kaplan pointed to trial evidence showing Bankman-Fried also donated to Republicans through “straw” donors to hide his involvement.

The judge called Bankman-Fried’s efforts to present himself as a “good guy” an act, adding, “The goal was power and influence.”

Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked his bail after finding he likely tampered with witnesses at least twice. Kaplan said he would recommend Bankman-Fried be sent to a prison close to San Francisco.

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Sam Bankman-Fried Urges Lenient Sentence, Citing FTX Fund Recovery

Sam Bankman-Fried’s lawyer urged a judge on Tuesday to impose a lenient sentence for the FTX founder’s conviction for stealing $8 billion (roughly Rs. 6,63,30 crore) from customers of the now-bankrupt cryptocurrency exchange, arguing clients would get most of their funds back.

In a sentencing submission, Bankman-Fried’s lawyer Marc Mukasey told U.S. District Judge Lewis Kaplan that a guidelines range between 5-1/4 and 6-1/2 years would be an appropriate prison term.

That is far less than the maximum sentence of 110 years he faces after a jury found him guilty in November on seven counts of fraud and conspiracy, in what prosecutors have called one of the biggest financial frauds in American history.

Bankman-Fried pleaded not guilty and is expected to appeal his conviction and sentence. He acknowledged making mistakes running FTX, but testified at trial that he never intended to steal customer funds.

Kaplan is set to sentence the former billionaire, who turns 32 next week, on March 28.

The lawyer’s submission was accompanied by letters of support from Bankman-Fried’s parents, psychiatrist, and others.

His parents, the Stanford law professors Joseph Bankman and Barbara Fried, said their son was uninterested in material wealth and worked hard to make customers whole in the month between Bahamas-based FTX’s November 2022 collapse and his arrest on fraud charges a month later.

“Barbara and I…witnessed firsthand his single-minded focus on getting money back to depositors, long after there was any possibility he would be able to save any of his equity or wealth,” Bankman wrote.

Mukasey called a 100-year guidelines range calculated by probation officers “barbaric”, saying it was based partly on a faulty assertion that FTX’s customers lost billions.

He pointed to the bankrupt company’s recent assertion that it expected to repay all customers in full to back up the argument that Bankman-Fried did not set out to steal.

“The conviction does not address whether Sam intended to pay the money back. He did,” Mukasey wrote.

The probation officers’ calculation is not binding on Kaplan. The U.S. Attorney’s office in Manhattan is expected to make its own sentencing recommendation by March 15.

Elizabeth Holmes or Michael Milken?

A graduate of the Massachusetts Institute of Technology, Bankman-Fried rode a boom in the values of digital assets such as bitcoin to a net worth Forbes magazine once estimated at $26 billion (roughly Rs. 21,55,31). His fortune evaporated in November 2022, when FTX declared bankruptcy after a wave of customer withdrawals.

At his month-long trial in Manhattan federal court, three former close associates testified that Bankman-Fried directed them to help loot FTX customer funds to plug losses at his Alameda Research hedge fund, even while presenting himself publicly as a responsible steward in the volatile cryptocurrency market.

Prosecutors said Bankman-Fried also used customer funds to buy luxury real estate in the Bahamas and to donate to U.S. politicians who might support cryptocurrency-friendly regulations.

Bankman-Fried testified that he did not realize how much Alameda owed to FTX until shortly before both failed.

Mukasey acknowledged Bankman-Fried’s case bore some similarities to that of Elizabeth Holmes, another young entrepreneur who was sentenced to 11 years in prison in 2022 for defrauding investors in her now-defunct blood-testing startup Theranos.

But he said Holmes put patients at risk, and suggested Bankman-Fried had more in common with Michael Milken – a Wall Street financier in the 1980s known as the “junk bond king” who was released from prison after serving just two years of an initial 10-year sentence on fraud charges.

“Given the same chance, Sam would dedicate his post-prison life to charitable works,” Mukasey wrote.

Mother says she would change places

Bankman-Fried has been jailed at Brooklyn’s Metropolitan Detention Center since August, when Kaplan revoked his bail after finding that he likely tampered with witnesses.

In a letter to Kaplan, Bankman-Fried’s psychiatrist George Lerner wrote that he is on the autism spectrum. Mukasey wrote that Bankman-Fried struggles to make eye contact and communicate with others, which could leave him vulnerable in a prison setting.

Bankman-Fried’s mother wrote that her son had taken responsibility for the errors that led to FTX’s collapse and was remorseful, but said she feared for his life in prison.

“His father and I face the very real possibility that we will not live long enough to see him freed,” Fried wrote. “I would gladly change places with him if I could.”

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FTX Founder Sam Bankman-Fried Convicted of Multi-Billion Dollar Fraud

FTX founder Sam Bankman-Fried was found guilty on Thursday of stealing from customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record, a verdict that cemented the 31-year-old former billionaire’s fall from grace.

A 12-member jury in Manhattan federal court convicted Bankman-Fried on all seven counts he faced after a monthlong trial in which prosecutors made the case that he looted $8 billion (roughly Rs. 6,66,00 crore) from the exchange’s users out of sheer greed.

The verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion (roughly Rs. 2,16,450 crore) personal fortune.

The jury reached the verdict after just over four hours of deliberations. Bankman-Fried, who had pleaded not guilty to two counts of fraud and five counts of conspiracy, stood facing the jury with his hands clasped in front of him as the verdict was read.

The conviction was a victory for the US Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who made rooting out corruption in financial markets one of his top priorities.

“The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it,” Williams told reporters outside the courthouse.

Once the darling of the crypto world, Bankman-Fried – who was known for his mop of unkempt curly hair and for wearing shorts and T-shirts rather than business attire – joins the likes of admitted Ponzi schemer Bernie Madoff and “Wolf of Wall Street” fraudster Jordan Belfort as notable people convicted of major US financial crimes.

US District Judge Lewis Kaplan set Bankman-Fried’s sentencing for March 28, 2024. The Massachusetts Institute of Technology graduate could face decades in prison.

His defence lawyer Mark Cohen said in a statement that he was “disappointed” but respected the jury’s decision.

“Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” he said.

After Kaplan left the courtroom, Cohen put his arm around Bankman-Fried as they spoke at the defence table.

As Bankman-Fried was led away by members of the US Marshals service, he turned around and nodded at his parents, the Stanford Law School professors Joseph Bankman and Barbara Fried, who were seated in the courtroom audience’s front row. Fried looked toward him and crossed her arm across her chest.

Bankman-Fried is set to go on trial next March on a second set of charges brought by prosecutors earlier this year, including for alleged foreign bribery and bank fraud conspiracies.

Bankman-Fried testified in own defence

Bankman-Fried’s was the first of several blockbuster cases Williams brought against former high-flying cryptocurrency executives to go to trial. Several crypto companies went bankrupt last year after the prices of bitcoin and other digital assets collapsed following a years-long boom.

Prosecutors argued during the trial that Bankman-Fried siphoned money from FTX to his crypto-focused hedge fund, Alameda Research, despite proclaiming on social media and in television advertisements that the exchange prioritized the safety of customer funds.

Alameda used the money to pay its lenders and to make loans to Bankman-Fried and other executives – who in turn made speculative venture investments and donated upwards of $100 million (roughly Rs. 832 crore) to US political campaigns in a bid to promote cryptocurrency legislation the defendant viewed as favorable to his business, according to prosecutors.

Bankman-Fried took the calculated risk of testifying in his own defense over three days near the close of trial after three former members of his inner circle testified against him. He faced aggressive cross-examination by the prosecution, often avoiding direct answers to the most probing questions.

He testified that while he made mistakes running FTX, such as not formulating a risk-management team, he did not steal customer funds. He said he thought Alameda’s borrowing from FTX was allowed and did not realize how large its debts had grown until shortly before both companies collapsed.

“We thought that we might be able to build the best product on the market,” Bankman-Fried testified. “It turned out basically the opposite of that.”

‘He thought the rules did not reply’

Prosecutors had a different view.

“He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars – to give himself money, power, influence. He thought the rules did not apply to him. He thought that he could get away with it,” prosecutor Danielle Sassoon told the jury on Thursday.

The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after entering guilty pleas, said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies’ finances.

The defense argued the three, who have not yet been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors may ask Kaplan to take their cooperation into account in deciding their punishment.

Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he likely tampered with witnesses.

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FTX Sues Parents of Founder Sam Bankman-Fried, Alleging Them of Misusing Company Assets

Bankrupt crypto exchange FTX on Monday sued the parents of founder Sam Bankman-Fried, saying that Stanford professors Joseph Bankman and Barbara Fried used the company to enrich themselves at the expense of FTX’s customers. 

FTX, now being led by turnaround specialist John Ray, said that company founder Sam Bankman-Fried ran FTX as a “family business” and misappropriated billions in customer funds for the benefit of a small circle of insiders, including his parents. 

Sam Bankman-Fried has pleaded not guilty to charges that he defrauded FTX customers by using their funds to prop up his own risky investments. He is currently jailed ahead of a trial scheduled to begin October 3. Other former FTX executives have pleaded guilty to criminal charges.

Bankman and Fried’s attorneys, Sean Hecker and Michael Tremonte, said in a joint statement that FTX’s claims were “completely false” and that the new lawsuit was a waste of funds that could be returned to FTX customers.

“This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins,” Hecker and Tremonte said.

FTX’s lawsuit alleges that Bankman and Fried accepted a $10-million (nearly Rs. 83 crore) cash gift and a $16.4-million (nearly Rs. 136 crore) luxury property in the Bahamas from FTX, even as the company teetered on the brink of collapse. Bankman and Fried also pushed FTX to make tens of millions of dollars in charitable contributions, including to Stanford University, FTX said. 

Bankman-Fried’s father, a tax specialist at Stanford Law School, often positioned himself as the “adult in the room” in a company run by his son, now 31, and other executives with little management experience. But Bankman “stayed silent” when he saw warning signs of fraud and did little to prevent FTX’s leadership from misappropriating customer funds, according to the lawsuit.

Fried was the strongest influence on FTX’s political contributions, causing Bankman-Fried and other executives to contribute millions of dollars directly to a political action committee that she co-founded, according to FTX.

FTX filed for bankruptcy in November 2022 in the wake of claims that it misused and lost billions of dollars worth of customers’ crypto deposits. 

FTX has recovered more than $7 billion (nearly. Rs. 58,300 crore) in assets to repay customers, and it is pursuing additional recoveries through lawsuits against FTX insiders and other defendants that received money from FTX before it went bankrupt.

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FTX Founder Sam Bankman-Fried Denies Witness Tampering, Seeks to Avoid Jailtime

Sam Bankman-Fried, the indicted founder of the bankrupt FTX cryptocurrency exchange, on Tuesday, said he never sought to intimidate witnesses at his scheduled October fraud trial, and there is no reason to jail him.

In a letter to US District Judge Lewis Kaplan in Manhattan, Bankman-Fried said prosecutors mischaracterised his intentions in giving a New York Times reporter the writings of former romantic partner Caroline Ellison, who is expected to testify against him.

“Mr. Bankman-Fried’s contact with the New York Times reporter was not an attempt to intimidate Ms. Ellison or taint the jury pool,” his lawyer, Mark Cohen, wrote in the letter. “It was a proper exercise of his rights to make fair comment on an article already in progress.”Bankman-Fried, 31, has pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at his hedge fund Alameda Research, where Ellison was chief executive.

He has been largely confined to his parents’ Palo Alto, California home on a $250 million (roughly Rs. 2,100 crore) bond since his December 2022 arrest.

Ellison is one of three former members of Bankman-Fried’s inner circle who pleaded guilty to fraud charges and agreed to cooperate with the US Attorney’s office in Manhattan.

Kaplan barred Bankman-Fried from speaking about the case and asked both sides to submit written arguments about possible jail.

In an affidavit submitted by the defence, Laurence Tribe, a Harvard University constitutional law professor, said Bankman-Fried had a right to “avoid projecting a false image of someone who is media-shy or, worse, someone whose consciousness of guilt makes him shun the media.”

Bankman-Fried’s lawyers also argued that restricted internet access at the Metropolitan Detention Center in Brooklyn, where he would be held, would leave him unable to prepare for trial.

Prosecutors may respond to Bankman-Fried’s letter by Thursday. It is not known when Kaplan will rule.

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FTX Founder Sam Bankman-Fried Accused of Witness Tampering

US prosecutors have accused FTX founder Sam Bankman-Fried of witness tampering and asked a federal judge to issue an order that would bar the former billionaire and other parties from making public statements likely to interfere with a fair trial.

The prosecutors wrote to US District Judge Lewis Kaplan on Thursday referencing a New York Times article titled “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case”.

The article reported excerpts from Ellison’s personal Google documents from before the collapse of FTX in which she spoke about being “pretty unhappy and overwhelmed” with her job and feeling “hurt/rejected” from her breakup with Bankman-Fried.

Ellison led Bankman-Fried’s Alameda Research hedge fund and has pleaded guilty to defrauding investors and agreed to cooperate with prosecutors. In December, Bankman-Fried said he and Ellison had been in a relationship but gave no further details.

Prosecutors said it was apparent Bankman-Fried shared documents with the New York Times and that his lawyers have since confirmed to the government that he met with one of the article’s authors in person and shared documents “that were not part of the government’s discovery material.”

Bankman-Fried’s spokesperson and lawyers did not immediately respond to requests for comment. The New York Times declined to comment, and Ellison’s lawyers did not respond to a Reuters request for comment.

The prosecutors argued that by sharing these documents, Bankman-Fried was trying to malign Ellison’s credibility, and that such conduct could chill witnesses from testifying and taint the jury pool.

“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defense through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone”, prosecutors wrote in the letter.

Earlier on Thursday, FTX Trading sued founder Bankman-Fried and other former executives of the cryptocurrency exchange, seeking to recoup more than $1 billion (nearly Rs. 88,200 crore) they allegedly misappropriated before FTX went bankrupt.

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FTX Sues Founder Sam Bankman-Fried, Seeks to Recoup Over $1 Billion

FTX Trading on Thursday sued founder Sam Bankman-Fried and other former executives of the cryptocurrency exchange, seeking to recoup more than $1 billion (nearly Rs. 8,200 crore) they allegedly misappropriated before FTX went bankrupt.

The complaint filed in Delaware bankruptcy court also names as defendants Caroline Ellison, who led Bankman-Fried’s Alameda Research hedge fund; former FTX technology chief Zixiao “Gary” Wang; and former FTX engineering director Nishad Singh.

FTX said the defendants continually misappropriated funds to finance luxury condominiums, political contributions, speculative investments, and other “pet projects,” while committing “one of the largest financial frauds in history.”

The alleged fraudulent transfers occurred between February 2020 and November 2022 when FTX filed for Chapter 11 protection, and can be undone–or “avoided”–under the US bankruptcy code or Delaware law, FTX said.

A spokesman for Bankman-Fried declined to comment. Lawyers for the other defendants did not immediately respond to requests for comment.

FTX is now led by John Ray, who helped manage Enron after the energy trader’s 2001 bankruptcy.

US prosecutors have called Bankman-Fried the mastermind of a fraud that led to FTX’s collapse, and included the misappropriation of billions of dollars of customer funds.

Bankman-Fried has pleaded not guilty to several criminal charges. Ellison, Wang, and Singh have pleaded guilty and agreed to cooperate with prosecutors.

According to Thursday’s complaint, the fraudulent transfers included more than $725 million (roughly Rs. 5,990 crore) of equity that FTX and West Realm Shires, an entity that Bankman-Fried controlled, awarded “without receiving any value in exchange.”

FTX said Bankman-Fried and Wang also misappropriated $546 million (about Rs. 4,500 crore) to buy shares of Robinhood Markets, while Ellison used $28.8 million (about Rs. 236 crore) to pay herself bonuses.

It also said some of Bankman-Fried’s criminal defense is being funded from a $10 million (nearly Rs. 81, 950 crore) “gift” he gave his father.

“The transfers were made when (FTX-related entities) were insolvent, and defendants knew it,” FTX said.

Federal law lets bankruptcy trustees avoid transfers of property made in the two years before Chapter 11 filings if the transfers are made for less than their value and with an intent to defraud a bankruptcy estate.

The case is FTX Trading Ltd et al v Bankman-Fried et al, US Bankruptcy Court, District of Delaware, No. 23-ap-50448. The main bankruptcy case is In re FTX Trading Ltd et al in the same court, No. 22-bk-11068. 

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FTX Alleges Former Lawyer of Aiding Sam Bankman-Fried’s Fraud, Silencing Whistleblowers

Bankrupt cryptocurrency exchange FTX sued one of its former top lawyers, accusing him of aiding fraud by company founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing at the company.

The complaint, filed on Tuesday in US Bankruptcy Court in Delaware, describes Daniel Friedberg, a former chief compliance officer at FTX and general counsel of its related crypto hedge fund Alameda Research, as a “fixer” for Bankman-Fried and other FTX executives who enabled the “wholesale raiding” of customer funds.

Friedberg “whitewashed” complaints from employees raising concerns about the activities of FTX and Alameda by settling claims for “inflated” amounts and in some cases hiring law firms that represented whistleblowers to perform legal work for FTX, the company said.

The settlement amounts are redacted in the complaint.

A lawyer for Friedberg and a spokesperson for FTX did not immediately respond to requests for comment.

The lawsuit accuses Friedberg of legal malpractice and breaching his fiduciary duty. It seeks to claw back “tens of millions” worth of cryptocurrency Friedberg received while working for FTX, along with his compensation and $3 million (roughly Rs. 24 crore) in bonuses.

FTX filed for bankruptcy in November 2022 after a run on customer deposits. The company’s new leadership has accused Bankman-Fried and his associates of widespread failures to implement corporate controls.

Bankman-Fried has been criminally charged in federal court in Manhattan with stealing billions in FTX customer funds to plug holes at the Alameda hedge fund and fund speculative investments. Bankman-Fried has pleaded not guilty and denied stealing funds.

At least three other FTX executives have pleaded guilty to US charges.

Friedberg has cooperated with US investigations into the FTX collapse, Reuters has reported.

Friedberg served as an adviser to Bankman-Fried and his companies while working at law firm Fenwick & West. He became an in-house attorney at both FTX and Alameda in 2020.

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Sam Bankman-Fried Banned From Using VPNs, Former FTX CEO Says He Used It for Football

Sam Bankman-Fried was blocked from using virtual private networks while out on bail, as a judge expressed concern that VPNs present similar risks to the FTX co-founder’s use of encrypted messaging apps. Bankman-Fried, who was charged with fraud after the cryptocurrency exchange collapsed, says he used a VPN just to watch football.

US District Judge Lewis Kaplan on Tuesday added the private networks, which hide a user’s IP address, to the list of technologies Bankman-Fried is barred from using. In a letter to Kaplan filed late Monday night, federal prosecutors said they recently discovered Bankman-Fried had used VPNs on two recent occasions.

The government said VPNs could be used to access international crypto exchanges, allow data transfers without detection and offer a covert method of getting onto the dark web.

The Big Game

In a letter early Tuesday morning responding to the government’s claims, Bankman-Fried’s attorney Christian Everdell said his client had used a VPN to watch NFL games through a subscription he purchased while living in the Bahamas.

“On January 29, 2023, he watched the AFC and NFC Championship games and on February 12, he watched the Super Bowl,” Everdell wrote. Those uses of the VPN aren’t relevant to any concerns raised by the government, the defense argued.

Kaplan had earlier expressed concern that Bankman-Fried could communicate with witnesses and other parties. The judge rejected a revised bail deal that would allow the FTX co-founder to use certain messaging apps, including WhatsApp, with technology that archived his messages, and also to make Zoom and FaceTime calls.

Kaplan scheduled a hearing for Thursday on revisions to the $250 million (roughly Rs. 2071) bail package.

Mary, Queen of Scots

At a hearing last week, Kaplan said he was concerned that without further restrictions, Bankman-Fried would easily find ways to shield communications with witnesses in the fraud case. He noted that encrypted letters sent by the imprisoned Mary, Queen of Scots, had only recently been deciphered.

“You don’t think this defendant is bright enough to encrypt something without a computer?” Kaplan asked in court. He suggested prosecutors’ focus on encryption apps like Signal was “short-sighted.”

Bankman-Fried, who has pleaded not guilty, is accused of committing a yearslong fraud at FTX, allowing customer funds to be used for trading at affiliated hedge fund Alameda Research and for personal expenses. He is living in his parents’ house in Palo Alto, California, after being released from custody in December.

The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).

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FTX’s Sam Bankman-Fried in Talks With US Prosecutors to Resolve Dispute Over Strict Bail Conditions

Sam Bankman-Fried is in talks with US prosecutors to resolve a dispute over the FTX cryptocurrency exchange founder’s bail conditions, his lawyer said on Thursday.

The judge overseeing Bankman-Fried’s criminal fraud case in federal court in Manhattan on Wednesday temporarily barred the 30-year-old former billionaire from contacting employees of FTX or his Alameda Research hedge fund, after prosecutors raised concerns he might tamper with witnesses.

His lawyers had previously countered that he had contacted current executives at the now-bankrupt exchange to offer “assistance” and not to interfere, and so the additional bail condition was not needed.

Bankman-Fried has pleaded not guilty and is under house arrest at his parents’ California home.

In a court filing, defense lawyer Mark Cohen asked US District Judge Lewis Kaplan to postpone a February 7 hearing on the matter, as well as a February 2 deadline to explain why he should be able to access and transfer cryptocurrency before trial.

“The parties would like to continue these discussions, which we are optimistic will lead to an agreement between the parties in the next few days and eliminate the need for further litigation,” Cohen wrote, noting that prosecutors consented to the request.

A spokesperson for the US Attorney’s Office in Manhattan declined to comment.

Once worth an estimated $26 billion (roughly Rs. 2,12,989 crore), Bankman-Fried was arrested in December after FTX collapsed.

Prosecutors have said he looted billions of dollars in FTX customer funds to plug losses at Alameda. Two former colleagues have pleaded guilty and are cooperating with prosecutors.

Bankman-Fried has acknowledged risk management failures, but said FTX collapsed because of a liquidity crunch and that he did not steal funds. A trial is scheduled for October 2.

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