Technology

Sam Bankman-Fried Seeks Right to Transfer FTX’s Crypto

Lawyers for the bankrupt crypto exchange’s founder said there was no evidence for restricting his access to crypto held by FTX as part of bail conditions in a fraud trial.

Lawyers for Sam Bankman-Fried have argued he should be allowed access to assets and crypto held by his former company FTX, saying there’s no evidence he’s responsible for previous alleged unauthorized transactions.

Bankman-Fried, who resigned as FTX’s chief executive officer on Nov. 11, 2022 when the crypto exchange filed for bankruptcy, is currently on bail facing charges including wire fraud and money laundering, to which he has pleaded not guilty.

As part of his bail conditions, Bankman-Fried was prohibited from accessing cryptocurrency held by FTX and its trading arm, Alameda Research, after the government pointed to illicit transfers made from Alameda wallets. The bar includes crypto purchased with FTX or Alameda funds.

“Nearly three weeks have passed since the initial pretrial conference and we assume that the Government’s investigation has confirmed what Mr. Bankman-Fried has said all along; namely, that he did not access and transfer these assets,” said a Jan. 28 letter from Bankman-Fried’s lawyer, Mark Cohen.

“Given that the sole basis advanced for seeking that condition has not been supported, we believe that the bail condition imposed at the conference should be removed,” Cohen told Lewis Kaplan, a judge in the Southern District of New York.

In a Jan. 27 filing, the U.S. Department of Justice requested a communications ban as an additional bail condition, saying that Bankman-Fried had attempted to contact FTX’s General Counsel Ryne Miller, and a potential witness in the case.

Cohen’s response broadly agrees to the restriction, but says Bankman-Fried should still have access to some former staffers, including his therapist George Lerner.

“Requiring Mr. Bankman-Fried to include counsel in every communication with a former or current FTX employee would place an unnecessary strain on his resources and prejudice his ability to defend this case,” Cohen said. “Many of these individuals are Mr. Bankman-Fried’s friends. Imposing a blanket restriction on his contact with them would remove an important source of personal support.”

Bankman-Fried attempted to “offer his assistance” in messages sent to Miller and new FTX CEO John Ray, which apparently went ignored by the intended recipients, Cohen said.

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