DOJ Proposes Only A Flip Phone And Limited Internet While FTX Founder’s On Bail



Sam Bankman-Fried should have limited access to the internet and only be allowed to use a flip phone—limited to voice calls and text messages—while on bail, the Department of Justice proposed to a judge late Friday, as the FTX founder remains at his parent’s home amid federal charges for alleged fraud at his cryptocurrency exchange.

Key Facts

Bankman-Fried would be limited to a flip phone or a non-smartphone with “either no internet capabilities or internet capabilities disabled,” according to the DOJ request, and will be prohibited from using any encrypted text message or voice call applications, like Signal.

A government-issued laptop configured with specialized virtual private networks (VPN)—used to encrypt internet use and disguise a user’s identity—limiting him to specific applications and websites, including Netflix, Doordash and Spotify, would also be provided and monitored.

Bankman-Fried should only be allowed VPNs to contact his lawyers or to access whitelisted sites—like Wikipedia, Forbes, the New York Times and other outlets—to build on his defense, prosecutors said.

Bankman-Fried also should be prevented from using his parents’ devices, as they must submit sworn statements listing the serial numbers and MAC addresses for their iPhones, Apple laptop and iMac desktop, which would be installed with security software that will monitor who is using them.

Other restrictions would include prohibiting him from purchasing any new devices and from contacting any current or former FTX or Alameda employees unless a lawyer is present.

Surprising Fact

Bankman-Fried’s internet privileges were restricted previously, after U.S. District Judge Lewis Kaplan and federal prosecutors discovered he was using VPNs. Kaplan argued Bankman-Fried could be using VPNs to access crypto exchanges, complete data transfers or access the dark web—though Bankman-Fried’s lawyers said he used the private networks to watch three football games in late January and February, including the Super Bowl, according to Bloomberg.

Key Background

Bankman-Fried faces eight federal charges for fraud and other financial crimes he allegedly committed while working for his cryptocurrency exchange FTX—which once hit a $32 billion valuation—and his trading firm Alameda Research. The 30-year-old resigned as FTX’s CEO on November 11 and was arrested 32 days later. He was then released from federal custody on a $250 million bail, covered in part by Larry Kramer, the former dean of Stanford Law School. Bankman-Fried was ordered to remain at his parents’ home under “strict” supervision until his trial, including wearing an electronic ankle monitor.

Further Reading

Feds Ask Judge To Delay SEC Proceedings Against Sam Bankman-Fried (Forbes)

Sam Bankman-Fried Released On $250 Million Bond—But He Only Put Up A Fraction Of That (Forbes)

Ex-Stanford Dean Bailed Out Bankman-Fried To Help ‘Steadfast Friends,’ He Says (Forbes).

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