Judge extends order limiting Sam Bankman-Fried's communications

A federal judge decided Thursday to keep in place the current restrictions on FTX founder Sam Bankman-Fried's communications while out on bail, extending an order prohibiting the disgraced crypto titan from using encrypted messaging apps or contacting former employees without lawyers present while out on bail.

In a bail modification hearing in Manhattan federal court, U.S. District Judge Lewis A. Kaplan extended the current order until Feb. 21, and called on Bankman-Fried's defense team and prosecutors to reach a more stringent agreement than the one he rejected earlier this week.

Bankman-Fried appeared before the judge wearing a dark suit, white shirt, and striped tie. During the discussions, the defendant asked for a pen and paper from his lawyers and then made notes that he handed over to his attorney Christian Everdell, who was making arguments about the encrypted communications.

Kaplan sounded skeptical of the tentative agreement made between the parties on Bankman-Fried’s communications restrictions, saying: "I am far less interested in the defendant's convenience given the record here." 

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"The fact that you've negotiated something that makes the government sort of comfortable and that makes you and your client comfortable doesn't necessarily make me comfortable," he added. 

The judge also noted he recently read that scholars have discovered encrypted communications from Mary, Queen of Scots from the XVI century. "You don't think this defendant is bright enough to encrypt something without a computer?" Kaplan asked the government.  

Everdell presented to the judge that, at least for WhatsApp, the defense has found a company that provides an archive for all communications – including any deleted messages – and that they could install it on Bankman-Fried’s phone.  

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Kaplan wants monitoring of all applications and not just WhatsApp, and sent off the parties to come back with more restrictive options.

The judge put limitations on Bankman-Fried's communications last week after prosecutors expressed concern that Bankman-Fried might try to influence witnesses using such apps as he awaits trial on several charges linked to the collapse of his cryptocurrency exchange.

The judge also prohibited Bankman-Fried from contacting staff at the Alameda Research hedge fund he founded, unless attorneys are present.

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The proposed agreement between Bankman-Fried's lawyers and federal prosecutors would have eased the restrictions Kaplan imposed, allowing the former FTX CEO to "place voice calls, FaceTime calls, and Zoom audio and video calls, and use iMessage, [and] SMS text."