Days after a federal judge shot down a request by FTX founder Sam Bankman-Fried to loosen his technology restrictions while on house arrest, the disgraced crypto entrepreneur remotely accessed his TV set in the Bahamas to watch the Super Bowl.
A lawyer for Bankman-Fried, who’s awaiting trial on a $250 million bond in an ankle bracelet at his parents’ Palo Alto, Calif. home, addressed his use of hidden internet networks in a 2 a.m. Tuesday court filing after Manhattan Federal Court prosecutors told the judge they’d discovered it with a pen register on Bankman-Fried’s Gmail account.
Christian Everdell said his client used a VPN on Jan. 29 to access an NFL Game Pass international subscription he bought when he lived in the Bahamas, where his collapsed trading platform was based, so that he could watch the the AFC and NFC Championship games.
A VPN — short for “virtual private network” — allows users to disguise their online identity by encrypting their internet traffic. People frequently use VPNs to access websites unavailable in their country, with the network hiding their IP address by redirecting it through a remote server.
Bankman-Fried used the VPN again on Sunday, three days after Judge Lewis Kaplan told him to refrain from using encrypted calling or messaging applications, to watch the Super Bowl, according to new court filings.
Prosecutors, in a letter, told the judge they know many people use VPNs for benign reasons. Nevertheless, Assistant District Attorney Danielle Sassoon noted the encrypted networks present “several potential concerns,” like their ability to hide access to international cryptocurrency exchanges blocked from U.S. users and provide a secure connection to the dark web.
Everdell told Kaplan the remote access didn’t link to anything over which prosecutors had raised concerns but that he would include a provision in a proposed set of new bail terms the parties must submit.
But in a Tuesday order, Kaplan partially denied a joint request from Bankman-Fried’s lawyers and prosecutors to give them until Feb. 17 to devise new bail restrictions. He ordered the parties to submit their plan by Wednesday and appear in court on Thursday.
“The defendant’s use of a VPN presents many of the same risks associated with his use of an encrypted messaging or call application,” Kaplan wrote. “I hereby amend the conditions of defendant’s release, effective immediately, to prohibit the defendant’s use of any VPN.”
Even though prosecutors endorsed them, Kaplan wasn’t comfortable with previously proposed modifications to Bankman-Fried’s bail terms after he was accused of contacting a key witness, FTX’s general counsel Ryne Miller.
As well as barring the FTX founder from contacting his former employees, the judge doesn’t want Bankman-Fried to have the ability to auto-delete messages — as his cooperating former colleagues said he was prone to do, according to court documents.
Bankman-Fried, 30, has pleaded not guilty to criminal wire fraud charges in a multi-billion fraud case carrying a potentially decades-long prison sentence. The feds say he diverted customer deposits traded on his platform to his crypto hedge fund Alameda Research and concealed donations to political candidates. He also faces charges by the Securities and Exchange Commission and the Commodities Futures Trading Commission.
Formerly valued at more than $30 billion, FTX filed for Chapter 11 bankruptcy protection on Nov. 11 and has already seen almost $700 million confiscated in his case. The feds say his alleged fraud could have impacted over one million people.
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