NYC judge refuses to sign off on new bail terms reached between Sam Bankman-Fried and the feds

A Manhattan judge rejected a request Tuesday from embattled crypto entrepreneur Sam Bankman-Fried to modify the conditions of his $250 million bail.

Lawyers for the one-time golden boy of digital currency wrote Federal Judge Lewis Kaplan Monday to say they reached a deal with the feds allowing Bankman-Fried to use Zoom, WhatsApp, FaceTime, and send text messages while under house arrest. But Kaplan declined to sign off on that agreement and told the parties they must appear in court Thursday.

Prosecutors on Jan. 27 asked Kaplan to bar Bankman-Fried from using encrypted messaging apps or contacting any current or former employees of his former trading platform FTX or hedge fund Alameda. The request came after the feds learned that while under house arrest, he contacted a witness with first-hand incriminating information about him, according to court documents.

“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,” Bankman-Fried wrote in a Jan. 15 message on Signal, court papers say.

Prosecutors said communications in which Bankman-Fried sought to “improve his relationship” with potential witnesses could discourage people from testifying against him when the case goes to trial later this year.

Witnesses have told the feds that Bankman-Fried directed that FTX and Alameda’s Slack and Signal channels automatically delete every 30 days, according to legal documents.

Caroline Ellison — the Alameda CEO who pleaded guilty to criminal wire fraud charges in December and is cooperating against her former flame — told prosecutors he discouraged keeping paper trails to make it harder for authorities to build a case, court records state.

Bankman-Fried, who’s earned comparisons to the late Ponzi schemer Bernie Madoff, has pleaded not guilty to wire fraud and conspiracy charges alleging he siphoned investors’ money from FTX, the world’s second-largest crypto trading platform, to his hedge fund Alameda. According to the feds, up to 1 million people lost money through the scam.

The 30-year-old is also charged with laundering stolen funds through political and charitable donations to Republicans and Democrats. He also faces charges by the Securities and Exchange Commission.

Bankman-Fried’s reputation went up in smoke after Alameda’s balance sheets were leaked and revealed an $8 billion hole in its accounts. Once valued at more than $30 billion, FTX filed for Chapter 11 bankruptcy protection on Nov. 11. Prosecutors have already confiscated almost $700 million tied to the fraud case.

His lawyers also filed a notice of appeal Tuesday over a decision to unseal the names of two signers of his staggering bond package, the largest in history. The other two signers are his parents, Stanford law professors whose Palo Alto, Calif., home is where he’s under house arrest.

A former Connecticut cop, who said he has no connection to the case, wrote Kaplan a note saying Bankman-Fried should go “directly to jail.”

“How many people has he ruined?” retired Detective Thomas Morrissey told the Daily News. “If a Black kid was taking billions of dollars from somebody, he’d be at Rikers Island in the worst cell they got there.”

Bankman-Fried’s lawyers did not immediately return calls seeking comment. The Manhattan U.S. attorney’s office declined comment.

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