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A judge is set to rule on tightening restrictions on the founder of cryptocurrency exchange FTX, Sam Bankman-Fried, following reports that he tried to threaten the lawyer for his former business.
Bankman-Fried appeared in federal court in New York on Thursday amid concerns from prosecutors that the former billionaire was trying to influence witnesses at his trial.
The 30-year-old shocked prosecutors after learning he recently sent a text message to FTX’s former general counsel, leading the judge in his case to condemn the communication as a “material threat of inappropriate contact with potential witnesses.” “.
It comes after US District Judge Lewis Kaplan last week temporarily barred Bankman-Fried from making any contact with employees of FTX or Alameda Research, his former hedge fund.
Bankman-Fried is facing federal fraud charges following the collapse of his cryptocurrency empire last November, and if convicted, he could be jailed for up to 115 years.
Sam Bankman-Fried, pictured, will go on trial for fraud in October after he pleaded not guilty.
Bankman-Fried pictured leaving federal court on Thursday, February 9
30-Year-Old Man Faces Federal Charges Following Collapse of His FTX Cryptocurrency Exchange
Judge Kaplan temporarily barred the crypto billionaire from speaking to his former employees last week as a condition of his release on $250 million bail, the largest bail in US history.
The court also blocked Bankman-Fried from using messaging apps that allow users to automatically delete messages until she faces federal court in Manhattan on Thursday.
Lawyers for the alleged scammer have argued that previous attempts to contact the current CEO and lawyer for FTX, now bankrupt, were attempts to offer “assistance” to his former business.
They denied that he intended to interfere with the investigation, which has seen various limitations in his ability to communicate ahead of his trial.
Bankman-Fried’s lawyers previously claimed in court documents Monday that they had reached an agreement with prosecutors to exempt certain people from the no-contact order imposed on the 30-year-old woman, reports Reuters.
The agreement would have allowed him to use some apps, including Zoom and WhatsApp, on the condition that he installed monitoring technology on his phone.
His lawyers had originally proposed cutting off contact with only a few potential witnesses in his fraud trial, including Alameda’s boss Caroline Ellison and former FTX technology chief Zixiao ‘Gary’ Wang.
Both Ellison and Wang have pleaded guilty to fraud charges and are reportedly cooperating with prosecutors as they target Bankman-Fried.
However, Kaplan later rejected potential changes to the no-contact agreement on Tuesday, saying any changes to his bail conditions would have to wait.
The judge did not offer an explanation as to why he rejected the deal.
Part of the now-rejected deal with prosecutors would also have seen Bankman-Fried drop an official objection to a bail condition that barred her from accessing assets from her former businesses.
The former millionaire will go on trial in October and, if convicted, could face up to 115 years behind bars.
Alameda CEO Caroline Ellison, left, and FTX chief technology officer Zixiao ‘Gary’ Wang are potential witnesses in the Bankman-Fried fraud trial. Both have pleaded guilty to fraud charges and are reportedly cooperating with prosecutors in the case.
Bankman-Fried faces eight criminal charges following the collapse of FTX, which lost hundreds of millions of dollars and wiped out the 30-year-old’s fortune.
Charges he has pleaded not guilty include wire fraud and money laundering conspiracy, and if convicted he could be jailed for up to 115 years.
Bankman-Fried became one of the most powerful political donors in the United States after amassing a net worth of $26 billion through digital currencies, including Bitcoin.
Last month, federal prosecutors seized nearly $700 million tied to the FTX founder, leading him to appear to have dumped various assets.
His fundraising efforts included the sale of a multimillion-dollar Washington D.C. townhouse owned by his brother, which hit the market for $3.28 million.
Bankman-Fried’s brother, Gabe, was a Wall Street trader and Democratic congressional staffer before establishing Guarding Against Pandemics, a nonprofit organization.
The townhouse, which was partially funded by the FTX founder, was reportedly used for dining and wine drinking for notable Washington politicians, while the crypto giant contributed to his political funds.
However, following the collapse of its cryptocurrency empire, the company has called on hundreds of US politicians who received donations from FTX to refund the contributions.
Political heavyweights who benefited from Bankman-Fried’s contributions include Nancy Pelosi, Kevin McCarthy, Mitt Romney and Paul Ryan.
Now they face being sued by the company if they don’t repay FTX, as the embattled company tries to repay its estimated 1 million creditors.