Bankman-Fried hearing set, but he can stay on West Coast

NEW YORK (AP) — The federal judge presiding over the case prosecutors brought against FTX founder Sam Bankman-Fried said Tuesday that the cryptocurrency entrepreneur can remain on the West Coast while his lawyers attend a hearing Friday.

Judge Lewis A. Kaplan set the pretrial hearing in New York City and excused Bankman-Fried from attending.

Three weeks ago, Kaplan suggested that jailing Bankman-Fried might be the best way to keep him from attempting to break rules he must follow under the terms of his $250 million bond. He has been allowed to stay with his parents in Palo Alto, California, while he awaits trial.

His communications have been a particular area of concern, though lawyers on both sides have apparently struck a deal that might be addressed by the judge on Friday.

Prosecutors said in a letter to the judge last Friday that Bankman-Fried’s attorneys had agreed Bankman-Fried could have a flip phone or other non-smartphone with either no internet capabilities or its internet capabilities disabled.

Several weeks ago, prosecutors alleged that Bankman-Fried accessed the internet twice through a virtual private network, or VPN, which blocks third parties from seeing online activity.

They also said he sent an encrypted message over the Signal texting app in January to the general counsel of FTX US, a move they argued might indicate witness tampering.

With the new proposal, Bankman-Fried’s phone functions would be limited to SMS text messages and voice calls.

He also could access a new laptop with limited use that will confine him to websites that have been whitelisted. They include sites he can use to prepare for his defense and others for personal news.

Prosecutors recently boosted charges against Bankman-Fried, who had pleaded not guilty to charges that he cheated investors and looted customer deposits at FTX, his cryptocurrency platform.

It was unclear if his lawyers would enter a plea to the new charges on Friday.

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