As you may already know, Sam Bankman-Fried was arrested on December 12, 2022, in the Bahamas on charges of securities fraud and money laundering related to the collapse of FTX which he has since been extradited to the U.S.
And it seems that things are only getting messier for him as the case unfolds.
Recently, federal prosecutors wrote a letter to U.S. District Court Judge Lewis Kaplan, requesting that the conditions of Bankman-Fried’s bail be modified to include a ban on private communications with current and former employees of FTX and Alameda Research.
Why the sudden change in bail conditions?
Well, it seems that Bankman-Fried reached out to at least one FTX employee – identified as Ryne Miller, the current general counsel for FTX US – in an alleged attempt to influence his future witness testimony.
In the letter, prosecutors quoted Bankman-Fried as saying to Miller:
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.
But it doesn’t stop there. Prosecutors also requested that Judge Kaplan prevent Bankman-Fried from using “any encrypted or ephemeral call or messaging application, including but not limited to Signal.”
It appears that Bankman-Fried used the Signal app to reach out to Miller, as well as other current and former FTX employees, asking to talk.
The prosecutors argue that Bankman-Fried’s message was a thinly-veiled attempt to “influence [Miller’s] potential testimony,” and that it is particularly concerning given Miller’s first-hand knowledge of Bankman-Fried’s conduct around the time of FTX’s collapse.
The prosecutors claim that Miller participated in Signal and Slack communications with Bankman-Fried and a small group of company insiders during the relevant events of November 2022, in which Bankman-Fried gave instructions for liquidating Alameda’s investments to satisfy FTX customer withdrawals, and indicated that he transferred approximately $45 million dollars of Alameda’s funds to FTX US to fill an apparent hole in FTX US’s balance sheet.
If true, this would refute Bankman-Fried’s continued declarations on social media and elsewhere that FTX US was solvent at the time the rest of his empire collapsed.
And as if all of that wasn’t bad enough, prosecutors also told Judge Kaplan that testimony from former Alameda Research CEO Caroline Ellison revealed that Bankman-Fried purposely used auto-deleting Slack and Signal messages for work communications because he knew that “many legal cases turn on documentation and it is more difficult to build a legal case if information is not written down or preserved.”
This autodeletion of FTX and Alameda’s Slack and Signal communications has impeded the government’s investigation, making it harder to build a case against Bankman-Fried.
All in all, it’s looking like a pretty rough ride for Bankman-Fried as this case continues to unfold. Whether or not he’s convicted guilty of the charges against him remains to be seen, but one thing is for sure – this is a story that is far from over.