Prosecutors and former FTX founder and chief executive Sam Bankman-Fried have reached a deal regarding his future contact with past and current employees of the now defunct exchange.
Sam Bankman-Fried Must Follow Strict Communication Rules
A letter from defense lawyer Mark Cohen details how Sam Bankman-Fried can and can’t communicate with others as he awaits his October trial at his parents’ home. Granted the judge gives the final seal of approval on the communication protocols, Cohen has said he’ll withdraw a request that will allow SBF to transact in crypto while awaiting trial.
U.S. District Judge Lewis Kaplan had recently imposed limitations on who Sam Bankman-Fried could connect with from his former businesses. Aside from not being able to speak with other executives, he was also not denied the use of chat apps like Signal that allow people to auto-delete messages or texts.
The idea was that SBF would potentially try to use these apps and his powers of communication to influence or harm witnesses.SBF has been freed on a $250 million bond, meaning that if he tries anything funny while out of jail (i.e., he tries to leave the country), those who have put up their money and property as collateral will be forced to part with it permanently to make the $250 million required payment.
Sam Bankman-Fried has been charged with several counts of fraud after it was alleged that he used customer funds to pay off loans taken out by his other firm Alameda Research. In addition, it’s believed that he used the funds to invest in luxury Bahamian real estate and purchase condominiums for himself, as well as several of his highest-ranking employees.
While the communication restrictions are likely to be taken off the table, Sam Bankman-Fried will still be barred from engaging in transactions over $1,000 except for those required to pay his legal team.
The fall of FTX is likely to go down as one of the biggest blunders to ever occur within the history of the crypto space. FTX was, at one point, one of the largest digital currency trading platforms in the world. Having first arrived on the scene in 2019, the company rose through the ranks to eventually earn its place as one of the top five crypto exchanges in 2022.
A Major Crash Occurs
Up to that point, Sam Bankman-Fried was labeled a genius, and his net worth – prior to the company’s collapse – was in the billions. However, things got fuzzy in mid-November of last year after SBF complained of a “liquidity crunch” online and said his company needed cash fast to stay afloat.
For a while, it looked like rival Binance was going to potentially purchase the company, but this didn’t happen, and eventually, FTX had no choice but to file bankruptcy.
