US prosecutors said their discovery that Sam Bankman-Fried used a virtual private network (VPN) to access the Internet on two recent occasions raises concerns that the FTX cofounder could be hiding his online activities.
The Manhattan judge handling Bankman-Fried’s criminal fraud case last week expressed his own concerns that even if the defendant is barred from using encrypted messaging apps such as Signal, he could still use old-fashioned secret code to contact witnesses in the case, similar to letters penned by Mary, Queen of Scots, more than 400 years ago.
US District Judge Lewis Kaplan on Thursday last week refused to approve an agreement negotiated between prosecutors and Bankman-Fried that would have required him to stop using Signal and other apps, and to only contact a specific set of former and current FTX employees, while preserving his right to use WhatsApp with monitoring technology, iMessage and also make Zoom and FaceTime calls.
Photo: AFP
In a letter to the judge late on Monday, a prosecutor in the office of the Manhattan US attorney said that the government is discussing with lawyers for Bankman-Fried how to fashion Internet ground rules acceptable to both sides and the court.
“As defense counsel has pointed out, and the government does not dispute, many individuals use a VPN for benign purposes,” Assistant US Attorney Danielle Sassoon wrote. “In the government’s view, however, the use of a VPN raises several potential concerns.”
A VPN is a mechanism of encryption that hides online activities from third parties and disguises a user’s whereabouts, Sassoon wrote, adding that such networks provide access to international cryptocurrency exchanges, allow data transfers without detection and offer a covert method of getting onto the dark web.
The defense team has said that Bankman-Fried would not use a VPN while discussions continue, the prosecutor told the judge.
Bankman-Fried has been living at his parents’ house in Palo Alto, California, after being released from custody in December on a US$250 million bail package.
He is accused of committing fraud at FTX and allowing customer funds to be used for trading at affiliated hedge fund Alameda Research and for personal expenses.
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