Sam Bankman-Fried claims he was not behind late December's move of $1 million in crypto from Alameda Research wallets, but a judge told him to keep his hands off company funds.
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Sam Bankman-Fried isn't allowed to transfer more than $1,000 in any form, crypto or fiat, without court permission.
But on Jan. 3, the judge overseeing the former FTX CEO's fraud and conspiracy trial added another rule, banning him "from accessing or transferring any FTX or Alameda assets."
That came as a result of tweets by Arkham Intelligence, which on Dec. 28 spotted more than $1 million being moved out of Alameda Research wallets to crypto mixing services designed to mask the origin and ownership of cryptocurrencies run through them. It said:
"These wallets had been inactive for multiple weeks before they 'woke up' last night… What gives?"
Dozens of Alameda wallets were involved in the incident, which saw more obscure tokens traded for Ether and Tether before going to the mixers.
Crypto Twitter was quick to point the finger at Bankman-Fried, who took to the social media channel for the first time in three weeks on Dec. 30 to deny it. He said:
"None of these are me. I'm not and couldn't be moving any of those funds; I don't have access to them anymore. I believe it is likely the case that various legit legs of FTX have the ability to access these funds; hopefully that's what's happening here. If not, hopefully one steps in soon to do so."
However, given the transfer of those funds through mixing services, it being "legit legs of FTX" seem unlikely.
Hands Off
Prohibiting Bankman-Fried from accessing or transferring any of his former companies' funds was brought up at the arraignment by an assistant U.S. attorney (AUSA), who told Judge Lewis Kaplan:
"We do not have evidence that it was the defendant. Even in a few days, additional assets could be accessed."
While Bankman-Fried's attorney, Mark Cohen, said he was working on language with prosecutors, the AUSA persisted, saying:
"It's hard to understand that they won't agree to the condition. He has tweeted falsely before… He transferred assets to foreign regulators, knowing of the U.S. bankruptcy case. He thought the foreign regulators would be more lenient. So, we feel a new condition is justified."
That refers to Bankman-Fried allegedly assisting Bahamian authorities in seizing hundreds of millions of dollars in crypto from FTX Digital Markets, the company's local trading firm. While those funds had been frozen by the Delaware bankruptcy court, Bahamian authorities allowed local residents to withdraw $100 million.
In November, he told crypto blogger Tiffany Fong why he agreed to that:
"It's where I am right now. And you do not want to be in the country with a lot of angry people in it. And you do not want your company to be incorporated in the country with a lot of angry people in it."
