Topline
A federal District Court judge in New York said Friday he was not satisfied with a proposal from prosecutors to restrict former billionaire Sam Bankman-Fried’s internet use while the disgraced FTX founder awaits his trial on criminal fraud charges, arguing the proposal might not go far enough.
A federal judge on Friday said a proposal to limit FTX founder Sam Bankman-Fried’s communications to … [+]
Key Facts
Judge Lewis Kaplan argued Bankman-Fried, who has pleaded not guilty to criminal fraud charges for allegedly misusing customers’ funds, is “inventive” and could “find a way around it and conceivably not get caught,” Reuters reported.
Federal prosecutors had proposed limiting Bankman-Fried’s communication to the use of a flip phone with no internet and a basic laptop configured with specialized virtual private networks (VPN) to restrict his internet use by blocking certain websites, while forbidding him from using any other electronic communication devices.
Bankman-Fried had been released from federal custody in December on $250 million bond, and was ordered not to open new lines of credit over $1,000 and to stay at his parents’ Stanford, California home under “strict” supervision until the start of his trial, which is scheduled for October 2.
Attorneys representing Bankman-Fried told Kaplan they would work on a revised proposal with prosecutors to address Kaplan’s concerns, Reuters reported.
Key Background
FTX—a former leader in the booming crypto market—filed for bankruptcy in November, after rival crypto company Binance backed out of a plan to purchase FTX and abruptly sold off its FTX tokens. In December, Bankman-Fried, 31, was arrested in the Bahamas—where FTX had been headquartered—and was extradited to the U.S. one week later after federal prosecutors filed criminal charges against him. Prosecutors allege he had orchestrated a months-long scheme to defraud FTX customers by diverting billions of dollars of their funds to pay expenses at its trading firm, Alameda Research. Bankman-Fried was indicted in a federal District Court in New York on charges of wire fraud and conspiracy to commit wire fraud on both FTX customers and lenders, as well as conspiracy to commit commodities fraud, conspiracy to commit money laundering, conspiracy to commit securities fraud and conspiracy to violate campaign finance laws. In February, he was indicted on an additional four counts, including conspiracy to commit wire fraud, make unlawful political donations, operate an unlicensed money transmitter and defraud the Federal Election Commission.
Chief Critic
Lewis’ decision to allow Bankman-Fried to await his criminal trial from his parents’ home in California has faced criticism, including from a retired Connecticut police officer, who argued last month Bankman-Fried “continues to mock you and the system of justice.”
Tangent
Three of Bankman-Fried’s former associates have pleaded guilty to fraud charges and are cooperating with prosecutors: FTX head of engineering Nishad Singh, who pleaded guilty to six counts of criminal fraud last week, as well as technology chief and co-founder Gary Wang and former Alameda CEO Caroline Ellison, who both pleaded guilty in December.
Further Reading
‘Please Do Your Job!!!’: Private Citizens Urge Judge To Jail Bankman-Fried Before Fraud Trial (Forbes)
Sam Bankman-Fried Arrested In Bahamas As U.S. Files Criminal Charges, Officials Say (Forbes)
Sam Bankman-Fried Released On $250 Million Bond—But He Only Put Up A Fraction Of That (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2023/03/10/sam-bankman-fried-judge-says-flip-phone-and-restricted-laptop-may-still-be-too-lenient-for-bail-measures/