Sam Bankman-Fried is back in court after prosecutors raise witness-tampering questions

Sam Bankman-Fried appeared in a New York federal court on Thursday, just over a week after the judge in the FTX founder’s fraud case tightened the bail conditions in response to allegations of witness tampering.

Prosecutors raised concerns after they learned that Bankman-Fried, who has pleaded not guilty to eight counts of fraud and conspiracy, recently sent a text message to the former general counsel of FTX, the bankrupt crypto exchange.

The judge said last week that the text message appeared to be a “material threat of inappropriate contact with prospective witnesses.”

US District Judge Lewis Kaplan last week ordered Bankman-Fried not to contact current or former employees of FTX without attorneys present, pending arguments from Thursday’s hearing.

Prosecutors said the former executive, identified as “Witness-1,” could be called to testify against Bankman-Fried in a trial.

In the message, Bankman-Fried wrote: “I know it’s been a while since we’ve talked. And I know things have ended up on the wrong foot. I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other. I’d love to get on a phone call sometime soon and chat.”

The judge disagreed with Bankman-Fried’s lawyers’ argument that the message was benign.

FTX, the cryptocurrency exchange co-founded by Bankman-Fried in 2019, collapsed into bankruptcy in November amid a liquidity crisis fueled by allegations about improper financial ties with Alameda, Bankman-Fried’s ostensibly separate hedge fund.

Federal prosecutors now allege that the firm, under the direction of Bankman-Fried, stole customer deposits to fund unrelated activities, such as political donations, luxury real estate purchases and covering losses at Alameda, Bankman-Fried’s hedge fund. At least two former executives have pleaded guilty to fraud and conspiracy charges in the case and are cooperating with investigators.

Bankman-Fried, 30 years old, has maintained he never knowingly commingled FTX customer funds to funnel them into Alameda, which placed large, highly risky bets in crypto markets. He could face 115 years in prison if convicted on all charges.

™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.