New York judge refuses to sign new bail terms reached between Sam Bankman-Freed and the feds

On Tuesday, a Manhattan court denied a request by crypto entrepreneur Sam Bankman-Freed to change the terms of his $250 million bail.

Lawyers for the former digital currency golden boy wrote to federal judge Lewis Kaplan on Monday that they agree with the feds allowing him to use Zoom, WhatsApp, FaceTime and send text messages while under house arrest. But Kaplan refused to sign the agreement and told the parties they were due to appear in court on Thursday.

On January 27, prosecutors asked Kaplan to stop Bankman-Fried from using encrypted messaging apps or contacting any current or former employees of his former trading platform FTX or hedge fund Alameda. The request came after the feds learned that while under house arrest, he contacted a first-hand witness who reported incriminating information about him, according to court documents.

“I’d love to reconnect and see if there’s a way for us to establish a constructive relationship, use each other as resources whenever possible, or at least check in on each other,” Bankman-Fried wrote in a January 15 post. . The signal, court documents say.

Prosecutors said the messages, in which Bankman-Fried sought to “improve his relationship” with potential witnesses, could discourage people from testifying against him when the case goes to trial later this year.

Witnesses told the feds that Bankman-Fried ordered Slack and Signal FTX and Alameda channels to be automatically deleted every 30 days, according to legal documents.

Caroline Ellison, CEO of Alameda, who pleaded guilty in December to criminal tax fraud and is cooperating with her ex-lover, told prosecutors she disapproves of keeping paper trails to make it harder for authorities to file a case, court records say.

Bankman-Fried, who has been compared to the late Ponzi scammer Bernie Madoff, pleaded not guilty to fraud and conspiracy charges, alleging he siphoned investor money from FTX, the world’s second largest cryptocurrency trading platform, to his Alameda hedge fund. . According to the feds, up to 1 million people have lost money due to fraud.

The 30-year-old is also charged with laundering stolen funds through political and charitable donations to Republicans and Democrats. He also faces civil charges from the Securities and Exchange Commission.

Bankman-Fried’s reputation was shattered by the Alameda balance sheet leak, which exposed an $8 billion hole in its accounts. Once valued at over $30 billion, FTX filed for Chapter 11 bankruptcy protection on Nov. 11. Prosecutors have already seized almost $700 million related to the fraud case.

Lawyers for Bankman-Fried did not immediately return calls asking for comment.