A federal judge on Tuesday ordered Sam Bankman-Fried not to use a virtual private network to access the internet, after prosecutors expressed concern the FTX cryptocurrency exchange founder might try to hide his online activities.
In a letter to US District Judge Lewis Kaplan on Monday, federal prosecutors revealed that Bankman-Fried had used a VPN on January 29 and February 12. ‘After learning this, the government promptly informed defense counsel and raised concerns about the defendant’s use of a VPN,’ which hides a user’s IP address by letting the private network redirect it to a remote server, prosecutors wrote.
‘As defense counsel has pointed out, and the Government does not dispute, many individuals use a VPN for benign purposes,’ they continued. ‘In the Government’s view, however, the use of a VPN raises several potential concerns.’
Prosecutors then go on to explain that VPNs encrypt data and can be used ‘to disguise a user’s whereabouts because a VPN server essentially acts as a proxy on the internet.
A VPN — short for “virtual private network” — allows users to disguise their online identity by encrypting their internet traffic. People frequently use VPNs to access websites unavailable in their country, with the network hiding their IP address by redirecting it through a remote server.
Bankman-Fried used the VPN again on Sunday, three days after Judge Lewis Kaplan told him to refrain from using encrypted calling or messaging applications, to watch the Super Bowl, according to new court filings.
Prosecutors, in a letter, told the judge they know many people use VPNs for benign reasons. Nevertheless, Assistant District Attorney Danielle Sassoon noted the encrypted networks present “several potential concerns,” like their ability to hide access to international cryptocurrency exchanges blocked from U.S. users and provide a secure connection to the dark web.
Parties therefore respectfully request additional time , until February 17, 2023, to discuss the implications of the defendant’s use of a VPN, to formulate their respective positions on how, if at all, this affects the proposed bail conditions and to make additional submissions to the Court,’ the federal prosecutors requested.
But in another letter to the judge on Tuesday, lawyers for Sam Bankman-Fried, said he simply used the VPN to watch the AFC and NFC Championship games on January 29, and the Super Bowl on Sunday. Still, they said, ‘in order to resolve the matter and as the Government notes, the defense is prepared to adopt a reasonable bail condition that allays any concerns of the Government or the Court about the use of a VPN.
‘Our client will not use a VPN in the interim.’ The judge has now ordered him to return to court on Thursday, as defense attorneys and prosecutors work to iron out a new bail agreement.