Benzinga - FTX (CRYPTO: FTT) co-founder Sam Bankman-Fried has been barred from using virtual private networks (VPNs) while out on bail after being charged with fraud following the collapse of a cryptocurrency exchange.
What Happened: U.S. District Judge Lewis Kaplan noted that VPNs pose similar risks to Bankman-Fried's use of encrypted messaging apps, according to a Bloomberg report.
Federal prosecutors expressed concerns about Bankman-Fried's use of VPNs, saying that they could potentially be used to access international crypto exchanges, allow data transfers without detection and offer a covert method of accessing the dark web.
In response, Bankman-Fried's lawyer Christian Everdell claimed his client had used VPNs just to watch NFL games via a subscription he had purchased while living in the Bahamas.
Also Read: UK Law Enforcement Uncover Illegal Cryptocurrency ATMs
Why It Matters: In a hearing last week, Judge Kaplan expressed concern that without further restrictions, Bankman-Fried would easily find ways to shield communications with witnesses in the fraud case, adding that encrypted letters sent by the imprisoned Mary, Queen of Scots, in the late 1500s had only recently been deciphered.
He rejected a revised bail deal that would allow Bankman-Fried to use certain messaging apps, including WhatsApp, with technology that archived his messages, and to make Zoom and FaceTime calls.
Regarding the use of encryption apps like Signal, which prosecutors had focused on, Kaplan suggested that this was "short-sighted," questioning whether Bankman-Fried was "bright enough to encrypt something without a computer?"
A hearing has been scheduled for Thursday to discuss revisions to Bankman-Fried's $250 million bail package.
Read Next: Blur NFT Marketplace To Close Funding Round At Unicorn Valuation: Report
Photo: Stefan Coders from Pixabay
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.