Judge Lewis A. Kaplan, who is presiding over Sam Bankman-Fried’s case, ruled Tuesday that his bond agreement be modified, prohibiting him from accessing or transferring funds related to his bankrupt crypto empire FTX and Alameda Research, the trading firm he founded in 2017.
Bankman-Fried, the controversial former crypto titan, entered a plea of not guilty at an arraignment hearing before U.S. District Judge Kaplan in New York City on Tuesday, denying allegations that he committed fraud, used investors’ funds to purchase real estate, or made political donations and to boost his crypto trading hedge fund Alameda Research.
During the arraignment in Manhattan, assistant U.S. Attorney Danielle Sassoon, acting on behalf of the government, requested Judge Kaplan to modify the bail conditions of Bankman-Fried so he could no longer access or transfer funds from his former businesses, particularly pointing out reports about transactions that happened last week.
While Sassoon recognized that the government has no evidence at the moment that the movement of funds was made by Bankman-Fried, she noted that the court should not “put full stock” on the crypto magnate’s denials considering that he made false tweets in the past.
At some point, Bankman-Fried appeared to have exchanged notes with his lawyer Mark Cohen, who later claimed they have been working with the government to identify the source of the transactions and noted that his client no longer had access to the wallets in question.
Cohen also requested a change of time to finalize the language to change the bail conditions, but the judge ruled that the updated bail condition was justified.
The judge’s decision came several days after blockchain researchers and sleuths discovered multiple instances where wallets linked to Bankman-Fried secretly moved funds.
The first instance was when crypto intelligence firm Arkham uncovered that 30 previously inactive wallets associated with Alameda Research suddenly woke up and moved more than $1 million in funds to crypto mixers on Dec. 29, a few days after Bankman-Fried walked out of the courthouse on a $250 million bail bond.
Sharp-eyed users may have noticed a number of interesting movements from Alameda wallets in the past 24 hours.
These wallets had been inactive for multiple weeks before they ‘woke up’ last night.
Over $1M has been sent through crypto-mixers by Alameda wallets.
What gives?
👇 pic.twitter.com/rUbqCMPjNX— Arkham | Crypto Intelligence (@ArkhamIntel) December 28, 2022
The second instance was when a pseudonymous DeFi educator who goes by the Twitter name BowTiedIguana shared on-chain data showing a series of wallets tied to Bankman-Fried moving around $689,000 to a centralized crypto exchange platform based in Seychelles and to the crypto bridge RenBridge.
Did disgraced crypto founder Sam Bankman-Fried just cash out $684k to a crypto exchange in the Seychelles while under house arrest?
His release conditions are that he not spend more than $1,000 without permission from the court.
Let’s examine the evidence on chain 👇
— BowTiedIguana (@BowTiedIguana) December 30, 2022
Bankman-Fried denied that he had anything to do with the wallets linked to Alameda Research on Dec. 30 and, in a tweet, said, “None of these are me. I’m not and couldn’t be moving any of those funds; I don’t have access to them anymore.”
U.S. District Judge Lewis Kaplan on Tuesday set Oct. 2 as Bankman-Fried’s trial date, which according to Sassoon, could last four weeks. Bankman-Fried, formerly worth an estimated $26 billion, is facing charges that could send him to prison with up to 115 years sentence.
