- FTX founder Sam Bankman-Fried has been banned from using VPNs.
- Lawyers claim that Bankman-Fried used a VPN in order to view Super Bowl LVII and the National Football League (NFL).
- The Bankman-Fried lawyers bargain new bail restrictions, but Judge Lewis Kaplan denies
Judge Lewis Kaplan of the U.S. District Court, who is in charge of the fraud case against Sam Bankman-Fried, ruled that the former FTX CEO’s use of VPNs while out on bail was prohibited because they carry risks comparable to those posed by the use of encrypted messaging applications. Bankman-Fried asserts that he only used a VPN to watch football. He was charged with fraud following the collapse of his crypto empire, FTX crypto exchange.
Private networks that mask a user’s I.P. address have been added to the U.S. District Judge Lewis Kaplan’s list of technologies that Bankman-Fried is not allowed to utilize as of Tuesday. Federal prosecutors claimed in a letter to Kaplan submitted late on Monday night that they had lately discovered that Bankman-Fried had used VPNs twice.
According to the authorities, VPNs can access foreign cryptocurrency exchanges, permit data transfers without being noticed, and provide a sneaky way to access the dark web.
Bankman-Fried Lawyers Bargain New Bail Restrictions
This ruling comes when the lawyers negotiate the bail agreements for the former crypto mogul with the prosecutors. Judge Kaplan has restricted Bankman Fried’s use of Signal and other encrypted texting services in one of the terms. Prosecutors claimed that he had used Signal to get in touch with one of the crucial witnesses in his fraud case, which led to the decision.
Bankman-lawyer Christian Everdell wrote a letter early on Tuesday morning in response to the government’s allegations, claiming that his client utilized a VPN to watch NFL games using a subscription he bought while living in the Bahamas.
Everdell stated:
“On January 29, 2023, he watched the AFC and NFC championship games, and on February 12, the Super Bowl.”
The defense maintained that these VPN uses are unrelated to the issues brought forth by the government.
Kaplan has already voiced concern over the possibility that Bankman-Fried would speak with witnesses and other participants. Until the judge decides the ultimate bail arrangement terms, Bankman-Fried is not permitted to talk with any of the current or former employees of FTX and its sister company Alameda Research.
The defense attorneys had asked Judge Kaplan to give them until Friday to submit new bail conditions. The latest bail arrangement would have allowed the co-founder of FTX to use WhatsApp and other messaging services to archive messages and make Zoom and FaceTime calls.
The judge nonetheless denied the request with the arguments in the case planned for Thursday. Judge Kaplan is set for a hearing to discuss changes to the $250 million bail package.
Kaplan expressed his concern at a hearing last week that if there were no more limitations, Bankman-Fried would readily discover means to conceal communications with witnesses in the fraud case. He mentioned the recently discovered decipherment of the encrypted letters sent by Mary, Queen of Scots, who was imprisoned.
Kaplan asked in court:
“You don’t think this defendant is smart enough to encrypt something without a computer?”
He said it was “short-sighted” for prosecutors to concentrate on encryption tools like Signal.
Charges against Bankman-Fried, who has entered a not-guilty plea, include years of fraud at FTX that allowed customer funds to be used for trading with a related hedge fund, Alameda Research, and personal expenses. He now lives with his parents in Palo Alto, California, after his release from detention in December.
