Bankman-Fried heads to court again as prosecutors seek stricter bail rules | CNN Business

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FTX founder Sam Bankman-Fried is ready to seem in New York federal court docket Thursday for the second time this week as a choose weighs a proposal from prosecutors to tighten the circumstances of his bail.

Prosecutors on Wednesday requested Choose Lewis Kaplan to considerably limit Bankman-Fried’s use of cellphones, computer systems and the web. They allege that Bankman-Fried discovered “loopholes” that allowed him to probably violate the circumstances of his bail, together with use of a VPN, or digital non-public community.

That request got here two weeks after prosecutors mentioned Bankman-Fried contacted a former FTX employee who’s a possible authorities witness, prompting Kaplan to quickly bar the previous CEO from contacting any present or former staff of his now-collapsed crypto empire.

“There may be now a document earlier than the Courtroom of a defendant who seems motivated to bypass monitoring and discover loopholes in current bail circumstances,” prosecutors mentioned in a letter to the choose Wednesday.

Bankman-Fried, 30, pleaded not guilty final month to eight federal counts of fraud and conspiracy. He has repeatedly acknowledged missteps as the pinnacle of crypto buying and selling platform FTX, however denies committing fraud.

Prosecutors say Bankman-Fried oversaw one of many largest monetary frauds in American historical past, stealing buyer deposits to fund political donations, luxurious actual property offers and canopy losses incurred by his crypto hedge fund, Alameda.

After his arrest in December, Bankman-Fried was launched on a $250 million bond. He’s beneath home arrest at his mother and father’ dwelling in Palo Alto, California, whereas he awaits trial in October. If convicted on all counts, he might resist 115 years in jail.

In a letter to Choose Kaplan on Wedesday, prosecutors proposed limiting Bankman-Fried’s use of digital gadgets to arrange for trial, permitting solely a Gmail account, voice calls and textual content messaging. He might use Zoom to speak with this attorneys, they mentioned.

In addition they requested the choose to restrict Bankman-Fried to 1 pc and one cellphone, each of which might have monitoring methods. He would additionally need to make his gadgets accessible for search if there’s a suspicion that he deviated from the bail circumstances.

Prosecutors famous Bankman-Fried selected to make use of a VPN to look at the Tremendous Bowl, though it was available to look at in the USA. Though VPNs aren’t unusual, they can be utilized to disguise a pc’s location and conceal on-line actions.

Bankman-Fried’s attorneys mentioned their shopper used a VPN solely to look at postseason NFL video games by means of a world subscription he’d beforehand bought whereas dwelling within the Bahamas.

If Bankman-Fried violated the phrases of his bail through the use of the VPN, Kaplan has the discretion to impose stricter phrases or revoke the deal fully. Revoking bail would land Bankman-Fried in a New York jail, a far cry from his mother and father’ multimillion-dollar California dwelling close to the Stanford College campus.

Sometimes, a court docket will impose additional restrictions earlier than revoking bail, mentioned Howard Fischer, a accomplice at Moses Singer, who just isn’t concerned within the case.

“Bankman-Fried doesn’t appear to have a way of the seriousness of his state of affairs,” he mentioned, citing the previous billionaire’s frequent public statements and engagement with media.

“For somebody dealing with appreciable jail time, he appears to be very assured in his potential to speak his manner out of bother,” Fischer added.

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