Federal prosecutors have reportedly asked a court to limit Sam Bankman-Fried’s communications.
Bloomberg reported Monday (Jan. 30) that the prosecutors want the conditions of the FTX founder’s bail to be expanded to prevent his use of encrypted messaging apps and from contacting current and former employees of the bankrupt cryptocurrency exchange.
The prosecutors presented evidence that Bankman-Fried emailed the CEO who replaced him at FTX, John J. Ray, upon the company’s bankruptcy, and used an encrypted messaging platform to contact the general counsel of FTX US, according to the report.
“I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible or at least vet things with each other,” Bankman-Fried wrote to the general counsel, who is a witness in the case, the report said.
While prosecutors characterized the communications as an attempt to influence the witness’ testimony, Bankman-Fried’s lawyer said it was an “innocuous attempt” to offer help in FTX’s bankruptcy process.
As PYMNTS reported Jan. 12, Bankman-Fried has also been blogging from his parents’ $4 million home in California, where he is under house arrest. In a Substack blog post published at the time, the founder and one-time CEO of FTX provided his personal take on the crypto exchange’s “pre-mortem overview” while also claiming his innocence even as his colleagues admitted their guilt.
“I didn’t steal funds, and I certainly didn’t stash billions away,” wrote Bankman-Fried, who is currently facing eight criminal charges levied against him by the U.S. Department of Justice.
The latest news around Bankman-Fried came on the same day that a commissioner of the Securities and Exchange Commission (SEC) reportedly said the failure of FTX highlights the need for greater disclosure for investors who buy company stock outside of public markets.
The Financial Times (FT) reported Monday (Jan. 30) that SEC Commissioner Caroline Crenshaw said that the highly publicized happenings at Theranos and WeWork also showed the need for disclosure.
In the case of FTX, Crenshaw said, the firm hadn’t even kept an accurate list of bank accounts, despite dealing with sophisticated investors, according to the report.
“Crypto really does add an element to this,” Crenshaw told the FT in an interview.
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