Sam Bankman-Fried, the former CEO of cryptocurrency exchange FTX, has been accused by federal prosecutors of trying to contact a potential witness in his ongoing criminal case, according to the January 27th report.
The U.S. attorney’s office for the Southern District of New York revealed in a court document that SBF communicated with the general counsel of the U.S. division of FTX using both email and the encrypted messaging service Signal.
Sam Bankman-Fried has been accused of committing fraud, money laundering, and violating campaign finance laws in relation to the downfall of FTX in the previous year.
SBF wrote to the general counsel of FTX U.S. On January 15th that he would:
really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other.
The filing stated that the communication seemed to indicate an attempt to sway the testimony of Witness-1, particularly worrying as the defendant is aware that Witness-1 has information that could implicate them.
The prosecutors have requested Judge Lewis A. Kaplan, who is responsible for handling SBF’s case, for forbidding him from communicating with current or former FTX staff or utilizing Signal or any other encrypted messaging applications.
In the court filing, prosecutors said SBF’s use of Signal could obstruct their efforts to determine whether he tried to contact more potential witnesses during his confinement.
The proposed bail conditions in combination would more effectively prevent the defendant from obstructing justice.
FTX Ex-Bankman-Fried’s Past Use of Encryption
For much of his tenure at FTX, SBF relied on Signal, allowing people to delete messages automatically. According to prosecutors, he also directed FTX and Alameda Research employees to set their communications to disappear automatically after 30 days or less.
The filing said:
The autodeletion of FTX and Alameda’s Slack and Signal communications has impeded the government’s investigation. Potential witnesses have described relevant and incriminating conversations with the defendant that took place on Slack and Signal that have already been autodeleted.
This latest development in the case highlights the challenges investigators face when trying to track down digital evidence in cases involving cryptocurrency and encryption.
As the use of digital currencies and encrypted messaging apps continues to grow, it is likely that we will see more instances of defendants using these tools to obstruct justice.
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