Bankman-Fried may only use non-smartphone: Prosecutors

Sam Bankman-Fried’s communication device will be a flip phone or some other “non-smartphone” without internet capabilities or such access disabled while he’s out on bail, prosecutors said.

Limiting the FTX founder’s access to a device that gained popularity when he was about three years old is the latest development in a fight over his communications. The functions on his phone will be restricted to voice calls and SMS text messages.

Bankman-Fried, 30, remains free on a $250 million bond but confined to his parents’ house in California with a monitoring device around his ankle. In a letter to US District Judge Lewis Kaplan late Friday, prosecutors said the parties had agreed to modifications in the conditions of Bankman-Fried’s release. 

Other restrictions include forbidding him from communicating with current or former employees of FTX or its Alameda Research trading arm other than immediate family members unless a lawyer is present. He also can’t use encrypted or ephemeral call or messaging applications, including Signal.

A spokesman for Bankman-Fried declined to comment on the agreement.

Kaplan has threatened to revoke Bankman-Fried’s bail package altogether and send him to jail ahead of his October trial if the Manhattan judge isn’t satisfied with the constraints. 

Bankman-Fried stands accused of a massive fraud that ended in FTX’s collapse in November. In voluminous public communications, he has taken responsibility for the debacle but said he did nothing illegal, and has pleaded not guilty.

The agreement was filed just days after former FTX engineering chief Nishad Singh pleaded guilty to fraud as part of a deal to work with prosecutors against his old boss. Gary Wang and Caroline Ellison pleaded guilty last year to charges related to their respective roles at the cryptocurrency exchange and Alameda, and are also working with the US.

According to Friday’s letter, Bankman-Fried is prohibited from using a virtual private network, or VPN, on his phone which encrypts internet use and disguises a user’s identity. Kaplan banned Bankman-Fried’s use of VPNs last month after his lawyers said he used one to watch football games. 

The judge also voiced concern the defendant could use apps such as Signal to influence potential witnesses.

The agreement permits Bankman-Fried access to a laptop but he must log on through a VPN allowing access to websites in just two categories: those his lawyers deem necessary to prepare a defense; and sites for other purposes that the US concludes don’t pose a risk. 

The second list of 23 websites for Bankman-Fried’s personal use include various news sites, Netflix, DoorDash, Uber Eats, Major League Baseball and the National Football League.

The deal covers Bankman-Fried’s mother and father, too, who must submit sworn statements listing serial numbers and MAC addresses for their iPhones, Apple laptops and a desktop iMac, according to the filing.

The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).

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