Prosecutors and attorneys representing Sam Bankman-Fried, the founder of FTX, a cryptocurrency platform, are seeking permission for him to use a non-smartphone device, such as a flip phone, while he is out on bail. The request comes amidst concerns that Bankman-Fried may be communicating in untraceable ways. Prosecutors have accused Bankman-Fried of using a virtual private network (VPN) to access the internet and of sending an encrypted message through the Signal texting app. Bankman-Fried has denied all charges brought against him.
Bankman-Fried has been accused of cheating investors and looting customer deposits at FTX. He was released on a $250 million bond in December and has been confined to his parents’ home in Palo Alto, California. Judge Lewis A. Kaplan, who is overseeing the case, has warned that Bankman-Fried may be jailed if his communications cannot be monitored to ensure the integrity of the trial.
The proposal submitted by Bankman-Fried’s lawyers and prosecutors suggests that his phone functions be limited to SMS text messages and voice calls. He would also be given a laptop with restricted internet access, which will only allow access to certain whitelisted websites. This includes websites that Bankman-Fried can use to prepare for his defense, such as FTX.com, and those for personal news, such as The New York Times and Netflix. The laptop would be configured to ensure that Bankman-Fried only logs onto the internet using specified VPNs.
The proposal also suggests installing monitoring software on the device to track any activity, and Bankman-Fried’s parents would be required to submit sworn affidavits stating that they will not bring any additional devices into their home or permit access to their own password-protected devices. The proposal has not yet been approved by Judge Kaplan.
Sam Bankman-Fried founded FTX in 2019. FTX is a cryptocurrency exchange that specializes in derivatives trading. In September 2020, FTX acquired Blockfolio, a cryptocurrency portfolio tracking app. The company has since launched several other products, including FTX Pay, which allows merchants to accept cryptocurrency payments.
Bankman-Fried is known for his philanthropy, having donated over $5 million to political campaigns and charities in the 2020 U.S. presidential election cycle. He has also pledged to donate at least 50% of his wealth to charitable causes.
The charges against Bankman-Fried were filed in November 2021 by the U.S. Attorney’s Office for the Southern District of New York. The charges include allegations that Bankman-Fried cheated investors out of tens of millions of dollars and looted customer deposits at FTX.
Bankman-Fried has denied all charges and has stated that he will fight the allegations in court. If found guilty, he faces up to 25 years in prison.
The case against Bankman-Fried has attracted significant media attention due to his high profile in the cryptocurrency industry. It has also raised questions about the regulation of cryptocurrencies and the potential risks associated with investing in the industry.
The proposal to restrict Bankman-Fried’s phone and internet access is seen as an attempt to address concerns that he may be communicating in ways that cannot be traced. If approved, the restrictions would be a significant limitation on Bankman-Fried’s ability to communicate with the outside world while he awaits trial. However, the proposal has yet to be approved by Judge Kaplan, and it remains to be seen whether it will be deemed sufficient to ensure the integrity of the trial.