FTX founder Sam Bankman-Fried was temporarily barred from contacting current and former employees of the failed criptocurrency exchange by himself, a U.S. judge ruled Wednesday over concerns from federal prosecutors that the 30-year-old might try to influence witnesses.
The ruling from U.S. District Judge Lewis Kaplan in New York prevents Bankman- Fried from reaching out to staff at the Alameda Research hedge fund unless attorneys are present, according to a ruling by U.S. District Judge Lewis Kaplan in New York. He is no longer allowed to use the Signal messaging platform.
Bankman- Fried is accused of demonishing FTX customer funds to buy property, donate to politicians and finance risky trades at Alameda Research, his hedge fund trading firm.
Bankman- Fried faces an upcoming trial on eight charges including wire fraud on customers, a related conspiracy charge, wire fraud on lenders, plus a conspiracy charge, in addition to conspiracies to commit commodities fraud, money laundering, and violations of campaign finance laws. He has pleaded not guilty to all charges, and his trial is tentatively scheduled to begin in October.
The Justice Department prosecutors filed a no-contact request with Kaplan late Friday after they discovered a message from Bankman-Fried to the general counsel of FTX on the Signal messaging app.
On January 15, Bankman- Fried said that they would really love to reconnect, use each other as resources when possible, or at least vet things with each other. The prosecutors interpreted the exchange as a sign that Bankman- Fried could try to influence witnesses in his upcoming trial who could testify against him.
Mark Cohen, who is Bankman- Fried's attorney, blasted the prosecutors' push and characterized the FTX founder's outreach to the company's general counsel as an innocuous attempt to offer assistance in FTX's bankruptcy process. The communications rules imposed on Bankman-Fried, who was placed under house arrest at his parents property in California, will run through at least February 7, when a hearing is scheduled to consider arguments from both sides, according to Reuters.
Bankman- Fried can only communicate with FTX and Alameda Research employees if they are present, it says.