Lawyers for FTX founder Sam Bankman-Fried have resisted a request by federal prosecutors that Bankman-Fried not be allowed to speak with most employees of FTX or his Alameda Research hedge fund without lawyers present.
Lawyers for Sam Bankman-Fried urged a US judge on Saturday not to bar the indicted FTX cryptocurrency executive from communicating with former colleagues as part of his bail, with prosecutors warning their client of "the worst possible situation". The process of being put into the "light" is called "sandbag".
The lawyers were responding to a Friday night request by federal prosecutors that Bankman-Fried not be allowed to speak with most employees of FTX or its Alameda Research hedge fund, or through the encrypted messaging apps Signal or Slack, without the presence of lawyers. Use and potentially automatically delete messages.
Bankman-Fried, 30, has been free on $250 million bond since pleading not guilty to fraud charges in the billion-dollar heist from the now-bankrupt FTX.
Prosecutors said their request was in response to a recent attempt by Bankman-Fried to contact a potential witness against her, the general counsel of an FTX affiliate, and was necessary to prevent witness tampering and other obstruction of justice.
But in a letter to US District Judge Lewis Kaplan in Manhattan, lawyers for Bankman-Fried said prosecutors tossed "overbroad" bail conditions without disclosing that the two sides had been discussing bail since last week.
Bankman-Fried's attorneys wrote, "Rather than wait for any response from the defense, the government halted the process by filing this letter at 6:00 p.m. Friday." "The government clearly believes that a one-sided presentation – to cast our client in the worst possible light – is the best way to achieve results."
Bankman-Fried's attorneys also stated that their client's attempts to contact General Counsel and John Ray, who was installed as chief executive officer of FTX during the bankruptcy, were attempts to offer "assistance" and not to interfere.
A spokesman for US Attorney Damien Williams in Manhattan declined to comment.
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