Patience Wearing Thin for Judge Overseeing Bankman-Fried FTX Case

Sam Bankman-Fried is heading back to New York to face a federal judge once more. 

This, as the disgraced FTX founder and his legal team had their request to adjourn Thursday’s (Feb. 9) oral argument on the conditions of Bankman-Fried’s bail denied by U.S. District Judge Lewis Kaplan

Having reached an agreement over the bail conditions with prosecutors, Bankman-Fried’s legal defense team indicated in a letter to Kaplan that there was no longer a need for the 30-year-old accused fraudster to travel to Manhattan. 

Kaplan disagreed, declining to immediately approve the new modifications to Bankman-Fried’s bail package and ordering the respective parties to appear before him for the previously scheduled oral arguments. 

Known to legal observers as a no-nonsense judicial veteran of Manhattan’s federal court with a penchant for irritability, Kaplan may be weary of the back-and-forth between Bankman-Fried, who is free on bail and living under house arrest in California, and the team of prosecutors charging him with eight criminal counts of fraud and conspiracy. 

The conditions of Bankman-Fried’s bail are just the latest in a slew of arguments between the two sides that, to certain watchers of the case, appear to be straining the veneer of respect for the judicial process. 

Witness Tampering and Inappropriate Contact

As reported by PYMNTS, federal prosecutors last month (Jan. 27) asked the court to limit Sam Bankman-Fried’s communications.

Their request that the FTX founder’s bail conditions be expanded to prevent his use of certain encrypted messaging apps and that he be banned from contacting both current and former employees of the bankrupt cryptocurrency exchange came in response to concerns that Bankman-Fried might try to influence witnesses or even go so far as to destroy evidence.

The prosecutors presented evidence that the one-time crypto executive, in addition to emailing current FTX CEO John J. Ray, used an encrypted messaging platform to contact the general counsel of FTX US.

“I know it’s been a while since we’ve talked. And I know things have ended up on the wrong foot. 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. I’d love to get on a phone call sometime soon and chat,” Bankman-Fried reportedly wrote to FTX’s former general counsel, who is likely to be a witness in the case.

Mark Cohen, one of the attorneys leading Bankman-Fried’s defense, replied that federal prosecutors are trying to paint his client “in the worst possible light,” and that Bankman-Fried merely made an “innocuous attempt” to offer help in FTX’s bankruptcy process. 

Kaplan wasn’t having it and described the outreach by Bankman-Fried as an attempt to have himself and potential trial witnesses “sing out of the same hymn book.”

In the time since, Bankman-Fried’s defense lawyers and the government prosecutors have reportedly agreed to a modification of the bail conditions that exempt certain individuals from the proposed no-contact list, as well as allows Bankman-Fried to make Zoom and FaceTime calls, send texts, and use WhatsApp with monitoring technology. 

Privacy Disputes

Also under dispute in the case are the names of the two anonymous individuals guaranteeing the crypto exchange founder’s $250 million bail. 

In response to a joint petition by eight major media outlets, including The New York Times, Wall Street Journal, CNBC, Reuters, The Associated Press, Bloomberg, The Washington Post, The Financial Times, and CoinDesk, Judge Kaplan has ruled that their names can be made public. 

On Tuesday (Feb. 7), Bankman-Fried’s lawyers moved to block the release of the bail guarantors’ identities, filing their appeal on the last possible day. The appeal prevents the names from being revealed until at least next Tuesday (Feb. 14). 

In his Jan. 30 ruling granting the petition to make the names public, Kaplan said the guarantors had voluntarily signed individual bonds in a “highly publicized criminal proceeding,” and had therefore opened themselves up to public scrutiny.

Still, the identity reveal is likely to be far less salacious than the public expects. That’s because the two anonymous individuals are not actually securing Bankman-Fried’s $250 million personal recognizance bond but instead a jointly proposed bail that separately required “two additional sureties, one of whom must be a non-family member, sign separate bonds in lesser amounts.” 

Per court documents, the two separate appearance bonds were for $500,000 and $200,000, respectively. 

“In contrast, the amounts of the Individual Bonds do not suggest the non-parental sureties are persons of great wealth or likely to attract attention of the types and volume to which defendant’s parents appear to have been subjected,” wrote Kaplan when granting the petition. 

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