Sam Bankman-Fried was ordered back to court this week by a federal judge after finding that the creator of the cryptocurrency trading website FTX used an untraceable method to access the internet.
Prosecutors and Bankman-Fried’s attorneys informed Judge Lewis Kaplan that the former “Crypto King” had used a virtual private network, or VPN, twice in the previous month, including days after the judge had expressed concern about the use of encrypted messaging apps. The judge scheduled a hearing for Thursday.
Bankman-Fried used the VPN to access an NFL Game Pass international subscription that he used while residing in the Bahamas to watch NFL playoff and Super Bowl games while out on bail in the US, according to a letter from Bankman-Fried’s attorneys to the judge.
Currently, Bankman-Fried is under house arrest at his parents’ Palo Alto, California, residence. Meanwhile, he is free on a $250 million bail as he awaits his fraud and conspiracy trial. His defense was to plead not guilty.
The judge stated, “The defendant’s use of a VPN offers many of the same hazards connected with his use of an encrypted messaging or telephone service.” The judge also observed that Bankman-Fried used the VPN at least once after being told not to use encrypted messaging applications. Bankman-Fried could only use VPNs, the court said, once the hearing was over.
The prosecution informed the judge overnight about Bankman-Fried’s usage of a VPN in late January and early February.
“The use of a VPN raises several potential concerns. First, a VPN is a mechanism of encryption, hiding online activities from third parties, including the Government. Second, it is a means to disguise a user’s whereabouts because a VPN server essentially acts as a proxy on the internet,” prosecutors wrote in a letter to the judge. “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,” they wrote
Judge denied the request for extra time to negotiate new bail conditions from the prosecution and Bankman-Fried’s attorneys, summoning them back to court for the second time in a week.
Bankman-Fried’s use of encryption and the possibility that the government may monitor his activities while he was out on bail raised concerns from the judge in the past.