FTX founder Sam Bankman-Fried, US prosecutors near new bail agreement

Sam Bankman-Fried faces a trial set for Oct 2 on charges of stealing billions of dollars in FTX customer funds. PHOTO: REUTERS

NEW YORK – Lawyers for Sam Bankman-Fried are nearing an agreement with United States prosecutors on revised bail conditions for the indicted FTX cryptocurrency exchange founder, who is trying to convince a sceptical judge he should remain free.

In a letter filed on Friday night in Manhattan federal court, Bankman-Fried’s lawyer Christian Everdell said both sides believe they are “close to a resolution”, and expect to formally propose new restrictions by next week.

Bankman-Fried, 31, faces a trial set for Oct 2 on charges of stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund, and making large illegal political donations to buy influence in Washington, DC.

Bail talks occurred this week after US District Judge Lewis Kaplan at a March 10 hearing renewed his concerns that Bankman-Fried’s electronic communication with others might exceed the bounds of his US$250 million (S$335 million) bail package.

Judge Kaplan’s approval is needed to modify Bankman-Fried’s bail.

The former billionaire has pleaded not guilty to eight counts, and not yet been arraigned on four. He is living under house arrest with his parents in Palo Alto, California.

Prosecutors raised the spectre of witness tampering in January after he tried to contact Mr John Ray, who became FTX’s chief executive when the company filed for bankruptcy in November, and an in-house lawyer.

Bankman-Fried’s lawyers have said their client was trying to help, not interfere.

At the March 10 hearing, prosecutors and defence lawyers proposed giving him a flip phone with no Internet capability and a basic laptop with limited functions.

That was too generous for Judge Kaplan, who said Bankman-Fried was “inventive” and could conceivably “find a way around” the restrictions without being caught.

In Friday’s letter, Mr Everdell also sought the judge’s permission to let Bankman-Fried use a laptop to access some FTX materials.

Though the laptop would lack monitoring software or restrict Bankman-Fried’s Internet access, a lawyer or paralegal would oversee his use and take the device away when Bankman-Fried finished with it, Mr Everdell said. REUTERS

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