By Abinaya V and Shubham Kalia
(Reuters) – U.S. prosecutors have raised concerns over FTX cryptocurrency exchange founder Sam Bankman-Fried’s usage of a Virtual Private Network (VPN) to access the internet and have asked a U.S. district judge for more time to discuss his bail conditions.
FTX collapsed and filed for bankruptcy in November, with Bankman-Fried accused of cheating investors and causing billions of dollars in losses. He pleaded not guilty on Jan. 3 to eight criminal charges including wire fraud and money laundering conspiracy.
Prosecution and defense lawyers have been negotiating the conditions for his use of electronics while he is out on bail pending the start of his trial in October.
The 30-year-old former billionaire is already temporarily barred from contacting current or former employees at his exchange and hedge fund. As a condition of his release on $250 million bond, the judge also banned him from using encrypted messaging apps such as Signal that let users auto-delete messages.
In a court filing made late on Monday, prosecutors said Bankman-Fried used a VPN to access the internet on Jan. 29 and Feb. 12.
“As defense counsel has pointed out, and the Government does not dispute, many individuals use a VPN for benign purposes. In the government’s view, however, the use of a VPN raises several potential concerns,” prosecutor Danielle Sassoon said in a court filing in the Southern District of New York on Feb. 13.
“For instance, it is well known that some individuals use VPNs to disguise the fact that they are accessing international cryptocurrency exchanges that use IPs to block U.S. users,” Sassoon said.
In the filing the prosecution asked the judge for an extension until Feb. 17 to resolve the issue.
Bankman-Fried’s attorneys asked for the same extension in a separate filing dated Feb. 14, in which they said their client had used a VPN to watch football championship games on Jan. 29 and the Super Bowl on Feb. 12. He would not use a VPN in the interim, they said.
Bankman-Fried faces up to 115 years in prison if convicted, though any sentence is at the discretion of the judge.
(Reporting by Abinaya Vijayaraghavan and Shubham Kalia in Bengaluru; Editing by Raissa Kasolowsky)
