A US judge questions Sam Bankman-Fried’s bail conditions

A US federal judge has questioned Sam Bankman-Fried’s “extraordinary” bail conditions following prosecutors’ allegations of possible witness tampering, raising the prospect the FTX founder could be forced to await his criminal trial in prison rather than at his parents’ home.

Judge Lewis Kaplan, who is leading the case against Bankman-Fried, questioned whether prosecutors’ suggestion to block the defendant from accessing the internet on certain devices was sufficiently stringent after the former billionaire launched an encrypted messaging app used to contact the General Counsel of FTX US and used a VPN to watch the Super Bowl.

“We’re dealing with someone. . .[who has done things that could amount to]a federal crime at release, namely witness tampering or attempted witness tampering,” Kaplan said Thursday at an hour-long hearing in Manhattan federal courthouse attended by Bankman-Fried.

“Why am I being asked to release him in this garden of electronic devices,” the judge added, referring to Bankman-Fried’s parents’ Palo Alto home, where he is locked up after he received a $250 million deposited a bond.

Bankman-Fried’s bail terms were originally agreed by a New York judge in December before Judge Kaplan was assigned the case. Activists have criticized the arrangement, claiming that Bankman-Fried will be given preferential treatment as an employee defendant while many lesser suspects are behind bars awaiting trial.

In the weeks since, the government has repeatedly attempted to change Bankman-Fried’s deposit terms after certain cryptocurrency wallets related to FTX and associated trading firm Alameda were emptied. Prosecutors have also accused Bankman-Fried of attempting to contact both FTX US general counsel Ryne Miller and John Ray, who is managing FTX’s bankruptcy.

Bankman-Fried’s attorneys have claimed that there is no evidence their client emptied the wallets in question and that Bankman-Fried’s messages to former colleagues were not an attempt to sway potential witnesses at the October trial .

Bankman-Fried’s attorneys have also claimed that they need the internet to communicate with their client and use shared apps like Google Docs. The government has argued that Bankman-Fried must use the internet to access evidence, including a read-only version of the FTX customer database.

In response to the government’s suggestion that Bankman-Fried only use certain monitored devices, Kaplan countered, “You trust him a lot, don’t you?”

The government’s proposal would allow Bankman-Fried to stay in “a house with a whole bunch of unsupervised devices,” Kaplan said, adding that there is “a solution, but it’s not one that anyone has proposed yet.” He went on to say that while this is not a proceeding where bail revocation is being discussed, “it could happen.”

Addressing Bankman-Fried’s attorneys, who had asked the court to impose much laxer restrictions on the use of technology, Kaplan went through the list of alleged bail violations, adding, “Your client did all of that, and your client is at large, in rather extraordinary conditions.”

Regarding using a VPN that uses encryption, “If there’s one person in this courtroom who knew[that a VPN can be used to circumvent surveillance]. . . I bet it’s your client.”

He added that many defendants “are in the federal system being detained and being asked to prepare their cases without access to the internet.”

Mark Cohen, attorney for Bankman-Fried, said his client was “literally on trial for his life” and now understands “there is no room for error.”

Kaplan ordered both sides to return within days with proposed orders that would address his concerns. “I want it to be close,” he said.