Sam Bankman-Fried Settles Bail Dispute With US Over Encrypted Apps

Sam Bankman-Fried has settled a dispute with federal prosecutors over his use of encrypted messaging apps and communications with former FTX employees while he is out on bail.

(Bloomberg) — Sam Bankman-Fried has settled a dispute with federal prosecutors over his use of encrypted messaging apps and communications with former FTX employees while he is out on bail.

The FTX co-founder, who has pleaded not guilty to fraud charges over the collapse of the cryptocurrency exchange, agreed not to use encrypted messaging apps like Signal as part of his revised bail conditions, but he will be allowed to send normal texts and also make Zoom and Facetime calls. He will also be able to use WhatsApp if he downloads monitoring technology on his phone.

The new conditions were detailed in a letter filed Monday by Bankman-Fried’s defense attorney, Mark S. Cohen, in Manhattan federal court. US District Judge Lewis A. Kaplan had scheduled a Thursday hearing on the prosecution’s request for a ban on Bankman-Fried’s use of encrypted apps and communications with former FTX colleagues.

Cohen asked that the hearing be canceled, saying the parties had reached an agreement on a more specific set of former FTX employees with whom Bankman-Fried would not communicate. Prosecutors had previously sought to bar all contact with former collagues, raising the possibility that Bankman-Fried might engage in witness-tampering.

Monday’s letter did not identify the people Bankman-Fried agreed not to contact, but Cohen had previously said he proposed a group including former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang. Both Ellison and Wang have pleaded guilty to fraud and are cooperating with prosecutors.

Bankman-Fried, 30, used Signal to contact FTX US’s General Counsel last month. He also emailed FTX’s new chief executive John J. Ray, who is overseeing the asset recovery process, suggesting they meet up in New York.

Cohen said the defense has also withdrawn its objection to an earlier bail condition proposed by the government which restricts Bankman-Fried from moving FTX or Alameda assets.

Bankman-Fried has been living at his parents’ house in Palo Alto, California, after being released from custody in December on a $250 million bail package. He is accused of committing a yearslong fraud at FTX and allowing customer funds to be used for trading at Alameda and personal expenses.

The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).

(Updates with details from court filing.)

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