FILE PHOTO: Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, leaves federal court in New York City, U.S., February 9, 2023. REUTERS/Mike Segar/File Photo
NEW YORK (Reuters) - U.S. prosecutors on Wednesday urged a judge to impose sharp restrictions on indicted FTX cryptocurrency exchange founder Sam Bankman-Fried's internet use, arguing existing conditions "leave too much room for inappropriate conduct."
U.S. District Judge Lewis Kaplan has barred the 30-year-old former billionaire, out on $250 million bail, from contacting current or former employees at his exchange and Alameda Research hedge fund, and from using encrypted messaging apps such as Signal that let users auto-delete messages.
That came after federal prosecutors in Manhattan raised concerns Bankman-Fried may be trying to influence potential witnesses ahead of his October trial.
He has pleaded not guilty to eight charges including wire fraud and money laundering conspiracy over the collapse of now-bankrupt FTX.
On Wednesday, prosecutors said Bankman-Fried's use of a virtual private network (VPN) to access the internet raised further concerns. They urged Kaplan to bar him altogether from using the internet except to review evidence against him or use email on his Gmail account.
He should remain permitted to use voice calls and SMS messages on his cell phone, but should only be allowed to use Zoom to communicate with his lawyers, prosecutors wrote.
Bankman-Fried's lawyers said his efforts to contact FTX's current general counsel and chief executive were attempts to help, not to interfere. They said he only used a VPN to watch National Football League playoff games.
They nonetheless proposed adding a bail condition that barred him from using a VPN unless required to access databases that contained prosecutors' evidence that he needed to prepare his defense.
They proposed letting him communicate by phone, email, SMS text messaging and Twitter direct messaging, while disabling iMessage from his phone.
Kaplan is set to hold a hearing on Bankman-Fried's bail conditions on Thursday.
(Reporting by Luc Cohen in New York; Editing by Daniel Wallis and Lincoln Feast.)
