Former FTX CEO Sam Bankman-Fried Restricted from Using encrypted messaging apps

It has been reported that a federal court has ruled against oral arguments asking that a former CEO of FTX, Sam Bankman-Fried, be permitted to use some chat applications.

As a condition of his release on a bond in the amount of $250 million, Judge Lewis Kaplan of the United States District Court for the Southern District of New York is reported to have upheld his ruling that Bankman-Fried be prohibited from using encrypted messaging apps. The report was published on February 9 by Reuters. On February 1, the judge issued an order requiring SBF to refrain from communicating using apps such as Signal. However, the legal team representing the former CEO and the prosecutors had previously negotiated a deal that allowed for exceptions, including the use of Facebook Messenger, Zoom, and FaceTime.

According to reports, Judge Kaplan said that he was “much less interested in [Bankman- Fried’s] convenience” than he was in SBF contacting possible witnesses in his criminal case. Court documents indicated that he had gone out to FTX US general counsel Ryne Miller and current FTX CEO John Ray. According to Bloomberg, the court reportedly said that Bankman-Fried may be “intelligent enough to encrypt anything without a computer,” implying that the existing bail conditions are required.

“There is still snail mail and there is still email and there are all sorts of methods to interact that don’t provide the same hazards,” said Kaplan. “There are many other ways to communicate that don’t present the same concerns.”

Following his arrest and arraignment, Bankman-Fried made a personal appearance in court as part of the bail hearing; but, since then, he has been mainly confined to the residence he shares with his parents in California. According to reports, the conditions placed on his release will continue to apply until the 21st of February as a result of Kaplan’s decision to prolong them.

It is anticipated that Bankman-criminal Fried’s trial will commence in the month of October. He is expected to be charged with eight separate crimes, the most serious of which include wire fraud and breaches of campaign financing legislation. The United States Attorney’s Office has requested that the court issue an order delaying the civil lawsuits, as well as the discovery from the Securities and Exchange Commission and the Commodity Futures Trading Commission, until after the outcome of the criminal case has been determined.


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Guarantors of Sam Bankman-Fried’s Bail Bond signed off

For the time being, neither of the two guarantors who endorsed a portion of Sam Bankman-250 Fried’s million dollar bail bond will have their identities revealed to the public.

A court has also decided against an arrangement that would have allowed Bankman-Fried to use certain messaging applications. This decision was made by the judge.

On February 7, at the very last minute, the attorneys for Bankman Fried submitted an appeal to stop the publishing of the identities of the guarantors. The appeal did not include any further grounds against the disclosure; nonetheless, it will delay the enforcement of the order until February 14 in order to permit an application for a second stay of execution.

Following the judgement that took place on January 30 in which United States District Judge Lewis Kaplan approved a combined petition from eight prominent media sites seeking to unseal the guarantors’ identities, it was anticipated that the appeal would be filed.

Given the unprecedented nature of the situation, Kaplan pointed out that it was quite possible that his ruling would be challenged in court.

He stated that the arguments made by Bankman-lawyers Fried’s that guarantors “would face similar intrusions” as Bankman-parents Fried’s lacked merit given that the size of their individual bonds was much smaller, at $200,000 and $500,000. He said that Bankman-lawyers Fried’s had no right to make those arguments.

Joseph Bankman and Barbara Fried, Bankman Fried’s parents, were the other two parties that signed off on the bond. The bond was approved by all four parties.

In addition, the court said that the guarantors had freely signed individual bonds in a “well publicized criminal procedure,” and had thus placed themselves up to the scrutiny of the general public as a result of their actions.

In the meanwhile, on February 7th, Kaplan decided against approving a joint agreement that had been negotiated between Bankman-legal Fried’s team and the prosecution. This agreement would have changed Bankman-bail Fried’s restrictions and enabled him to use certain messaging applications.

Although Kaplan did not cite a rationale for refusing the request, he did mention that more discussion on the topic will be place at a hearing scheduled for February 9.

After it came to light that the former CEO had been communicating with both current and former members of staff, Judge Kaplan issued a ruling on February 1 that prohibited Bankman-Fried from contacting employees of FTX or Alameda Research. The judge justified this decision by citing the potential for “inappropriate contact with prospective witnesses.”


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Former FTX CEO ordered not to contact current or former employees

As a condition of his release from federal custody, the federal court who is presiding over the criminal case against Sam Bankman-Fried, the former chief executive officer of FTX, has ruled that he is not allowed to have any contact with the present or former workers of the exchange.

In a ruling issued on February 1, 2019, Judge Lewis Kaplan of the Southern District of New York stated that in order for Bankman-Fried to remain free on bail until the conclusion of his trial, he was to be prohibited from communicating with current or former employees of FTX or Alameda Research “except in the presence of counsel.” As part of his ruling, Kaplan added that SBF was not allowed to communicate with anyone using encrypted messaging applications such as Signal. Earlier filings made by the prosecution stated that the former CEO of FTX had used the app to communicate with the current general counsel of FTX US, Ryne Miller. Kaplan’s ruling prohibits SBF from communicating with anyone using such applications.

“The undisputed information that is available to the Court regarding the ‘nature and seriousness of the danger posed by [defendant’s continued] release’ on the existing conditions has changed substantially since he was released, and there appears to be a material threat of inappropriate contact with prospective witnesses,” said Kaplan. “The information has changed substantially since he was released, and there appears to be a material threat of inappropriate contact with prospective witnesses,” said Kaplan. “The Court concludes that this danger is obviously and persuasively sufficient to support the imposition of additional restrictions awaiting the entire argument of the cross-applications,” which was originally written as “that risk is clearly sufficient to warrant the imposition of further conditions.”

According to Kaplan, SBF was the driving force behind the decisions to delete all Slack and Signal communications between employees of FTX and Alameda beginning in 2021. SBF allegedly told the former CEO of Alameda that any potential legal case would be more difficult to build without proper documentation. In his judgement, he also referenced the Signal communications he had with Miller and other techniques for getting in touch with “other present and former FTX workers.”

The court has not yet made a decision about whether or not SBF would also be prohibited from accessing funds from FTX and Alameda as part of the terms of his release. In a document submitted on January 30, the Department of Justice alleged that Bankman-Fried had contacted FTX CEO John Ray to explore potential avenues for gaining access to the company’s money. A hearing on the subject is scheduled to take place on February 7, and Judge Kaplan has said that he will attend.

The trial of Bankman-Fried is set to get underway in October at the United States District Court for the Southern District of New York, where he is being prosecuted on eight felony charges, one of which is wire fraud. The bankruptcy proceeding for FTX is also now ongoing in the District of Delaware, where the debtors have recently sought subpoenas for information and documents from SBF’s family members.


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Japan-based messaging app will offer trial run of native token starting in March

Users of Japanese messaging giant LINE will soon be able to use the app’s native token for payments at select online merchants in a limited trial.

In a Tuesday announcement, the LINE Corporation said that starting on March 16, users would have the option of paying with native LINK token (LN) — not to be confused with Chainlink (LINK) — at any of LINE Pay’s online merchants. The trial period, which will run until Dec. 26, is aimed at testing real-life use cases for the tokens in addition to increasing the convenience and number of payment options for users.

Source: Mikhail Nilov, Pexels

LINE Pay said it was considering adding other cryptocurrencies including Bitcoin (BTC) and Ether (ETH) to its payments options in the future, in addition to strengthening its partnerships with blockchain firms. Data from Statista shows there were 86 million monthly active LINE users as of the third quarter of 2020 — more than 68% of the country’s population of 126 million.

Launched in August 2018, the LN token is currently trading at $142.78, having risen by roughly 22% in the last 7 days. The token has been available for trading on crypto exchange Bitmax following an August 2020 agreement. As of the end of 2021, there were 30 crypto exchange businesses operating in Japan that had been approved by the country’s Financial Services Agency.

Related: Japan’s financial regulators may propose legislation in 2022 restricting stablecoin issuance

A consortium of Japan-based financial institutions and major corporations announced in November that they planned to trial and launch a yen-based digital currency in fiscal 2022. The country’s central bank, the Bank of Japan, is still in the research phase of developing a digital yen, expecting to complete its first trials by March.