They are looking to bar Bankman-Fried from using encrypted messaging apps and limit his ability to speak with former colleagues at FTX and Alameda Research, unless a lawyer is present.
According to Reuters, federal prosecutors petitioned US District Judge Lewis Kaplan on Friday to impose the tougher restrictions, citing Bankman-Fried's "recent attempts to contact prospective witnesses."
Bankman-Fried was caught sending a message via Signal on January 15 to a contact named "Witness-1," later discovered to be the general counsel of FTX's American affiliate. In the message, he voiced his desire to have a "constructive relationship" or "at least vet things with each other."
Given the potential impact such conversations could have on the case, federal prosecutors deemed Bankman-Fried's actions "particularly concerning," and suggested "contact with witnesses may intimidate them."
"The defendant's request to 'vet things with each other' is suggestive of an effort to influence Witness-1's potential testimony, and the appeal for a 'constructive relationship' likewise implies that Witness-1 should align with the defendant," they argued.
On Saturday, Bankman-Fried's lawyers responded, accusing federal prosecutors of attempting to block them from taking part in discussions regarding bail conditions.
"Rather than wait for any response from the defense," his lawyers wrote, "the government sandbagged the process, filing this letter at 6:00 pm on Friday evening. The government apparently believes that a one-sided presentation - spun to put our client in the worst possible light - is the best way to get the outcome it seeks."
Bankman-Fried is currently free on $250 million bail after being accused of "orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform's customer funds for his own personal benefit and to help grow his crypto empire."
The SEC estimated Bankman-Fried defrauded investors out of $1.8 billion.
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