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DOJ Seeks to Ban Sam Bankman-Fried From Contacting FTX Employees

DOJ Seeks to Ban Sam Bankman-Fried From Contacting FTX Employees

The Justice Department on Friday asked a federal judge to bar FTX founder

Sam Bankman-Fried

from communicating with current and former employees of the collapsed crypto exchange without a lawyer present after prosecutors alleged he recently contacted a potential witness in his criminal case.

Mr. Bankman-Fried, who faces federal charges related to the implosion of FTX, reached out to the general counsel of the company’s U.S. operation through an encrypted messaging application earlier this month, federal prosecutors said in a filing. Prosecutors said Mr. Bankman-Fried has also contacted other current and former FTX employees and are concerned that the communications could lead to witness tampering.

Prosecutors also requested the judge prohibit Mr. Bankman-Fried from communicating through encrypted messaging applications like Slack and Signal, saying that when he headed FTX he directed employees of the company and his crypto-investment firm Alameda Research to set their communications on these platforms to auto-delete after 30 days. That policy has impeded the government’s investigation, prosecutors said.

“Potential witnesses have described relevant and incriminating conversations with the defendant that took place on Slack and Signal that have already been autodeleted because of settings implemented at the defendant’s direction,” prosecutors said in the filing.

A spokesman for Mr. Bankman-Fried declined to comment. FTX’s U.S. general counsel, Ryne Miller, couldn’t immediately be reached.

The Manhattan U.S. attorney’s office charged Mr. Bankman-Fried last month with stealing billions of dollars from FTX customers while misleading lenders and investors. He pleaded not guilty and is currently under court-ordered confinement in his parents’ Palo Alto, Calif., home while he awaits trial.

Mr. Bankman-Fried sent a Jan. 15 Signal message to the general counsel in which prosecutors allege he said he “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.”

Prosecutors didn’t identify the other employees that Mr. Bankman-Fried has allegedly tried to contact but called the communications to the general counsel and others troubling.

“Were the defendant to ‘vet’ his version of relevant events with potential witnesses, that might have the effect of discouraging witnesses from testifying in a manner contrary to the defendant’s narrative,” the Justice Department said in the filing.

Write to James Fanelli at james.fanelli@wsj.com

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