Days after a federal judge denied FTX founder Sam Bankman-Freed’s request to ease restrictions on his technology while under house arrest, the disgraced crypto entrepreneur remotely accessed his TV in the Bahamas to watch the Super Bowl.
A lawyer for Bankman-Fried, who is awaiting trial on a $250 million bail wearing an ankle bracelet at his parents’ Palo Alto, California home, addressed his use of hidden internet networks at 2 a.m. Tuesday after federal prosecutors Manhattan courts said he was using hidden internet networks. Judge, they found it using a manual logger on Bankman-Freed’s Gmail account.
Christian Everdell said that on Jan. 29, his client used a VPN to access an international NFL Game Pass subscription he bought while living in the Bahamas, where his collapsed trading platform was based, so he could watch AFC and NFC championship games.
VPN – short for “virtual private network” – allows users to hide their identity online by encrypting their internet traffic. People often use a VPN to access websites that are not available in their country, while the network hides 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 apps to watch the Super Bowl, according to new court documents.
Prosecutors told the judge in a letter that they were aware that many people were using VPNs for benign purposes. However, Assistant District Attorney Danielle Sassoon noted that encrypted networks present “several potential problems,” such as their ability to hide access to international cryptocurrency exchanges blocked from U.S. users and provide secure connections to the dark web.
Everdell told Kaplan that the remote access did not involve anything prosecutors had raised concerns about, but that he would include the provision in a proposed set of new bail conditions that the parties would have to submit.
But on Tuesday, Kaplan partially rejected a joint request by lawyers and Bankman-Fried prosecutors to give them until February 17 to develop new bail limits. He ordered the parties to submit their plan by Wednesday and appear in court on Thursday.
“Respondent’s use of a VPN carries many of the same risks as its use of encrypted messaging or a calling app,” Kaplan wrote. “I am hereby amending the terms of Respondent’s release, effective immediately, to prohibit Respondent from using any VPN.”
Although prosecutors supported them, Kaplan was not happy with the previously proposed Bankman-Freed bail changes after he was accused of contacting a key witness, FTX General Counsel Ryan Miller.
In addition to preventing the FTX founder from contacting his former employees, the judge doesn’t want Bankman-Freed to have the ability to automatically delete messages — as his cooperating former colleagues say he was prone to do, according to court documents.
Bankman-Fried, 30, has pleaded not guilty to wire fraud charges in a multi-billion dollar fraud case that could potentially carry a ten-year prison sentence. The feds say he diverted client deposits traded on his platform to his cryptocurrency hedge fund Alameda Research and hid donations to political candidates. He also faces charges from the Securities and Exchange Commission and the Commodity Futures Trading Commission.
FTX, previously valued at over $30 billion, filed for Chapter 11 bankruptcy protection on Nov. 11, and nearly $700 million has already been forfeited in its case. The feds say his alleged scam may have affected more than a million people.