Sam Bankman-Fried reached out to the current general counsel of FTX US with a proposal to "vet things with each other" — raising alarm bells with prosecutors.
A judge has been asked to tighten Sam Bankman-Fried's bail conditions — amid allegations he could be trying to tamper with witnesses.
In a letter addressed to Judge Lewis Kaplan, the U.S. Department of Justice revealed that SBF reached out to the current general counsel of FTX US via email and Signal. The message, dated Jan. 15, said in part:
"I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other."
Prosecutors say this is problematic because Bankman-Fried could end up communicating with people who will later be called upon to give evidence in a trial.
It's important to stress that SBF technically hasn't broken his bail conditions through these communications — at present, he has the ability to contact prospective witnesses.
But going forward, the judge has been asked to approve an amendment to the bail conditions that means SBF will be prohibited from contacting both former and current employees of FTX and sister trading firm Alameda Research. Prosecutors also want his access to encrypted messaging apps — like Signal — to be restricted.
Analyzing the Message
In the letter, prosecutors said SBF message to the prospective witness — and a proposal to "vet things with each other" — could indicate that the fallen entrepreneur is attempting to influence their testimony.
The person Bankman-Fried contacted — referred to as "Witness-1" in this letter — allegedly has information that could be incriminating. The U.S. Department of Justice added:
"The government has interviewed Witness-1, who has firsthand knowledge of the defendant’s conduct during the charged conspiracies, including during the collapse of FTX in November 2022. Witness-1 participated in Signal and Slack communications with the defendant and a small group of company insiders during the relevant events of November 2022."
Prosecutors also pointed out that their request is not an unusual one, as many defendants in a case are often subject to restrictions on who they can contact.
"Efforts by the defendant to improve his relationship with potential witnesses that may testify against him may itself constitute witness tampering. Were the defendant to 'vet' his version of relevant events with potential witnesses, that might have the effect of discouraging witnesses from testifying in a manner contrary to the defendant’s narrative."
The U.S. Department of Justice also noted that current and former FTX and Alameda employees are "vulnerable to intimidation" because they were supervised and compensated by Sam Bankman-Fried.
Prosecutors have suggested that certain individuals could be exempt from the bail conditions if Sam Bankman-Fried has a "close personal relationship" with them — and stressed that he would still be able to participate in interviews with witnesses as long as his attorneys are present.
Cutting Some Slack
The letter concludes by warning SBF's use of Signal could lead to obstruction of justice — and claims that, in 2021, he requested that all communications through this channel be deleted after 30 days.
Caroline Ellison, the former CEO of Alameda Research, told the government:
"The defendant indicated, in substance and in part, that many legal cases turn on documentation and it is more difficult to build a legal case if information is not written down or preserved."
Prosecutors said this approach "has impeded the government's investigation" — with witnesses describing "incriminating" conversations with SBF that have since been wiped.
Mark Cohen, who represents Sam Bankman-Fried, says his client denies allegations that he was trying to influence a witness — and claims prosecutors are attempting to portray him in "the worst possible light."
SBF was making "an innocuous attempt to offer assistance in FTX's bankruptcy process," Cohen said — adding that this doesn't warrant tighter bail restrictions.