A federal judge in the United States has shown growing frustration with FTX founder Sam Bankman-Fried's internet use while on bail. Judge Lewis A. Kaplan suggested that jail might be the only way to prevent him from communicating in ways that can't be traced on electronic devices.
Bail Conditions Not Yet Changed
The judge did not immediately change the $250 million bail package that allows Bankman-Fried to live with his parents in Palo Alto, California, while preparing for trial on charges of cheating investors and looting customer deposits at FTX.
Possibility of Incarceration Raised
However, the judge raised the possibility for the first time that jail might be the only way to ensure that Bankman-Fried won't use electronic devices in ways that can't be tracked. Judge Kaplan asked prosecutors, "Why am I being asked to set him loose in this garden of electronic devices?"
"Drastic Alternative" Proposed by Prosecutors
Assistant U.S. Attorney Nicolas Roos suggested a "drastic alternative" of banning Bankman-Fried's use of all electronic devices. However, he added that it would be difficult for him to prepare for a trial tentatively set for October if that were to occur.
Alleged Encrypted Message Sent
The judge noted that according to prosecutors, Bankman-Fried "has done things that suggest to me that maybe he has committed or attempted to commit a federal felony while on release." The prosecution claimed that Bankman-Fried sent an encrypted message over the Signal texting app to the general counsel of FTX US.
Federal Prosecutors' Request to Limit Bankman-Fried's Electronic Communication
On Thursday, prosecutors asked Judge Kaplan to limit Bankman-Fried's use of electronic devices and the internet more severely, including banning him from messaging applications and requiring installing a device monitoring program on his cellphone and computer. In court papers, they described Bankman-Fried as "a technologically sophisticated person with both the ability and the inclination to seek workarounds of more narrowly drawn bail conditions."
Lawyer Calls Proposals "Draconian"
Bankman-Fried's lawyer Mark Cohen called the proposals by prosecutors "draconian" requests that would make it hard for lawyers and the defendant to prepare for trial. The judge noted Bankman-Fried's apparent bail violations, including accessing an encrypted internet site to watch the Super Bowl. The judge mocked Bankman-Fried's use of an encrypted method to watch the game, but Cohen responded that there wasn't a T.V. in the house.
Tight Bail Restrictions to Be Imposed
The judge said, "I want this to be tight, not just tight in characterization, but tight in fact." Bankman-Fried has been confined with electronic monitoring to his parent's home since his December arrest on charges of cheating investors. He has pleaded not guilty.