Summary

  • Sam Bankman-Fried, the CEO of Alameda Research, is getting a non-internet phone while out on bail.
  • The phone is necessary to comply with the terms of his bail, which includes no internet access.
  • The phone is a “burner” phone, meaning it is a pre-paid phone with no contract and no personal information associated with it.

Sam Bankman-Fried, the former CEO of crypto trading platform FTX, has been granted new bail conditions that restrict his internet usage, according to prosecutors cited by Bloomberg. The $250 million bail remains in place, but Bankman-Fried must now use a non-internet-connected flip phone and is prohibited from using encrypted or ephemeral call or messaging apps.

The request for the new conditions was submitted to U.S. District Judge Lewis Kaplan of the Southern District of New York in response to accusations that Bankman-Fried tried to contact witnesses. He is also not allowed to contact current or former FTX or Alameda Research trading arm staff other than direct family members unless accompanied by a lawyer.

The collapse of FTX occurred over a 10-day period in November 2022. It was triggered by a CoinDesk report that revealed Bankman-Fried’s trading firm, Alameda Research, maintained a $5 billion position in FTT, the native token of FTX. This sparked widespread alarm in the cryptocurrency industry about his companies’ unreported leverage and solvency.

Bankman-Fried resigned as CEO of FTX on Nov. 11 and was replaced by court-appointed John Ray. The following day, FTX filed for Chapter 11 bankruptcy protection, revealing that around 130 other connected entities were also involved in the process. According to the bankruptcy filings, FTX had assets and liabilities between $10 billion to $50 billion.

Bankman-Fried is accused of orchestrating a major scam that resulted in FTX’s demise in November. He has taken full responsibility for the disaster but pleaded not guilty.

The new bail conditions are an attempt to ensure that Bankman-Fried does not contact witnesses or use the internet to further his alleged scam. It remains to be seen if the restrictions will be enough to prevent further wrongdoing.