The case against Sam Bankman-Fried continues to grow and grow.
Bit by bit, but with rare speed, federal prosecutors continue to weave their web around the former crypto king.
The former trader, known in the crypto sphere by the initials SBF, is now charged with 13 criminal counts, including fraud against FTX clients and investors.
The Department of Justice added a 13th charge to the file on March 28. This is an accusation linked to alleged corruption of Chinese officials. Federal prosecutors accuse SBF of paying a "multimillion" bribe to officials in China to unfreeze an account that belonged to his hedge fund Alameda Research. The account contained $1 billion worth of cryptocurrencies, according to court documents.
The same day, Judge Lewis A. Kaplan, who is in charge of the case at the U.S. District Court for the Southern District of New York, approved a request by the prosecutors in early March, asking that the terms of the bail of the former trader be toughened.
Only SMS Text Messages
SBF will, from now on, only use a flip phone, or a non-smartphone, and will only be able to access a limited list of websites.
"The new phone will not be a smartphone and will not have Internet access," the Judge said in the court documents published on March 28. "Upon purchase, defense counsel shall provide the make and model of the new phone to the government."
The new phone will be limited to SMS text messages and voice calls. All other message applications are prohibited, according to the documents. Bankman-Fried will also provide the government with identifying information for the new phone, including the serial number etc.
This tightening of his bail conditions comes after Kaplan said he could "conceivably” revoke Bankman-Fried’s bail. The judge found that there was a "threat” of witness tampering. A few days after his release under bail, Bankman-Fried contacted the former general counsel of FTX and used a virtual private network, or VPN, days after the judge had said that he wanted to restrict the use of encrypted devices.
The former trader will also receive a new laptop on which a suite of applications and websites will be pre-installed. He does not have the right to visit other websites or to download and use other applications.
For his personal use, the list of websites and apps, including websites of news media and tech groups, is as follows: Nytimes.com, Nypost.com, Ft.com, Bloomberg.com, bloomberglaw.com, Forbes.com, WSJ.com, Businessinsider.com, Opensecrets.org, Prnewswire.com, Puck.news, Reuters.com, Coindesk.com, Cointelegraph.com, Theblock.co, Decrypt.co, Beincrypto.com, Netflix.com, open.spotify.com, Doordash.com, Ubereats.com, Amazon.com, MLB.com and NFL.com.
His his parents, with whom he currently lives in California, agreed not to let him use their tech devices.
"The defendant's parents have agreed to not allow the defendant to use the parents' devices, to password protect the parents' devices, to safeguard the passwords from the defendant, to not allow the defendant to have the passwords to the parents' devices in any form, and to install monitoring software on the parents' devices (...) that will photograph the device's user every five minutes," the court documents read.
Not Allowed to Contact Former and Current FTX Employees
Judge Kaplan also prohibited Bankman-Fried from contacting or communicating with current or former employees of FTX and Alameda, who are not members of his immediate family. The exception is if he does it in the presence of lawyers or if the federal prosecutors or the court allow him to do so.
Finally, Bankman-Fried, who is a fan of video games, is banned from using any other cellphones, tablets, computers, video games (including video game platforms and hardware) that permit chat or voice communication, or 'smart' devices with Internet access.
These new conditions will be implemented in a week. In the meantime, Bankman-Fried is authorized to continue to use his smartphone and his laptop which will then be given to his attorneys.
Federal prosecutors accuse him of alleged securities fraud, wire fraud, and multiple conspiracy counts, related to FTX customers and Alameda's lenders. Additional charges include illegal campaign contributions, money laundering, operating an unlicensed money-transmitting business and bank fraud.
The former crypto king has pleaded not guilty. But three of his lieutenants pleaded guilty to fraud, and agreed to cooperate with investigators.
The former trader was released on bond on Dec. 22, after being extradited from the Bahamas, where he lived and where FTX was headquartered. His release had been secured after his parents signed a $250 million recognizance bond, pledging their California home as collateral.
The trial of the former trader is scheduled for October.
