As a third member of Sam Bankman-Fried’s inner circle became a prosecution witness, lawyers for the FTX co-founder were preparing for a more immediate fight: his use of the internet and mobile apps while out on bail, Bloomberg News reported. Bankman-Fried now faces the culmination of a tense standoff with the judge in his criminal fraud case over his communications. Free on a $250 million bond but confined to his parents’ house with a monitoring device around his ankle, he has already angered U.S. District Judge Lewis Kaplan by using encrypted-messaging apps and a virtual private network, or VPN, which hides a computer’s identity. “Why am I being asked to set him loose in this garden of electronic devices?” Judge Kaplan demanded at the most recent bail hearing in lower Manhattan, on Feb. 16. For now he has barred Bankman-Fried from using either of those tools and from contacting former or current FTX employees. Late Wednesday, in response to a court order, the two sides jointly proposed a pair of technology consultants to advise the skeptical judge on a raft of restrictions that balances the defendant’s rights and needs with the integrity of the judicial process. Kaplan has threatened to revoke the bail package altogether and send Bankman-Fried to jail ahead of his October trial if he isn’t satisfied with the constraints.
