Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, leaves his court hearing at a federal court in New York
Reuters

KEY POINTS

  • A federal judge set a hearing for Thursday after prosecutors alerted him of Bankman-Fried's use of VPN
  • Prosecutors were concerned that Bankman-Fried's VPN use would prevent them from monitoring his behavior online
  • Bankman-Fried's defense team claimed their client only used VPN for his NFL Game Pass subscription

Sam Bankman-Fried, the disgraced founder of crypto trading platform FTX, has been slapped with new bail restrictions after using a virtual private network (VPN) to allegedly watch the Super Bowl.

United States District Judge Lewis A. Kaplan reportedly set a hearing for Thursday after prosecutors alerted him of Bankman-Fried's use of VPN while on house arrest for charges related to the fall of his cryptocurrency exchange, according to a CNN report.

Bankman-Fried reportedly used a VPN to access the internet on Jan. 29 and Feb. 12, raising concerns that his use of a private network prevents them from monitoring his behavior online.

"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," the prosecutors wrote to Judge Kaplan, according to CNN.

"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."

Meanwhile, Bankman-Fried's defense team claimed that their client only used VPN for his NFL Game Pass subscription, which he used to watch the Super Bowl and the AFC and NFC championship games.

"The defendant's use of a VPN presents many of the same risks associated with use of an encrypted messaging or call application," Judge Kaplan argued, as quoted by CNN.

He had also denied Bankman-Fried's request to extend the deadline for submission of further proposed modifications, ordering them to show up in court Thursday.

The FTX founder might also lose access to gadgets like cell phones, tablets and computers in light of the VPN issue, the Daily Beast reported.

According to the outlet, the government filed a motion to restrict Bankman-Fried from accessing "cellphones, tablets, computers and the internet" except for a limited set of uses like reviewing defense materials and communicating with his counsel.

Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, arrives on the day of a hearing at Manhattan federal court
Reuters