US prosecutors asked a New York judge to prevent Sam Bankman-Fried from contacting former FTX colleagues and using an encrypted messaging app, admitting the founder of the crypto company communicated with potential witnesses in an upcoming criminal trial.
In a letter sent to the court on Friday, the government alleged that Bankman-Fried had been “in direct communication” through the Signal messaging application with the general counsel of the bankrupt cryptocurrency exchange, who could be asked to take the stand in the case against his former boss.
The letter did not name the general counsel, but the role was filled by former Sullivan & Cromwell attorney Ryne Miller, who joined FTX US in 2021.
Bankman-Fried has claimed Miller and Sullivan & Cromwell forced people to file for bankruptcy, which they deny. The law firm had worked for FTX and was therefore retained as lead counsel in the bankruptcy.
Bankman-Fried wrote in a blog on January 12: “S&C and [Miller] was the main party supporting and threatening me to name a candidate of my own choosing as CEO of FTX – including the solvent entity in FTX US – who then filed for Chapter 11 and appointed S&C as counsel for the debtor entity.
The government on Friday said Bankman-Fried, who was released on bail in December after being extradited from the Bahamas to face eight criminal charges in the US, contacted FTX’s general counsel on January 15 through the Signal app, as well as by email.
Prosecutors said he wrote: “I would really like to reconnect and see if there is a way for us to have a constructive relationship, use each other as a resource if possible, or at least check something out” and contact other FTXs and now. employees.
Assistant US attorney Danielle Sassoon on Friday said: “The defendant’s request to ‘examine things one by one’ shows an attempt to influence the potential testimony of Witness-1, and the appeal for a ‘constructive relationship’ also shows that Witness-1 must comply. with the defendant.”
Sassoon added that the government had interviewed FTX’s general counsel, “who has direct knowledge of the defendant’s actions”.
Sassoon said Bankman-Fried has been in contact with the general counsel of FTX in the lead-up to the collapse of the company in November, in order to liquidate the investment in the trading affiliate FTX Alameda to allow customers from the exchange to withdraw completely.
He also asked judge Lewis Kaplan to amend Bankman-Fried’s bail conditions to prohibit him from using encrypted or ephemeral messaging platforms including Signal. He claimed that the defendant had used the app to hide communications from law enforcement, and set messages on Signal and Slack to disappear after 30 days while on FTX.
The government said it learned from former Alameda boss Caroline Ellison, who reached a plea agreement with prosecutors last month and is expected to testify against Bankman-Fried, that the former FTX boss had chosen to set the communications to automatically delete because he knew the information could be used in legal case.
The automatic deletion of FTX and Slack and Signal Alameda’s communications has “impeded the government’s investigation”, Sassoon said.
Miller’s attorney declined to comment. On Saturday, an attorney for Bankman-Fried told the court that the government was trying to portray his client “in the worst possible way,” and disputed prosecutors’ characterization of the defendant’s communications. Judge Kaplan ordered that the full interaction be submitted to the court.