Sam Bankman-Fried deleted a Slack message and tweets after FTX's top lawyer told the company to preserve records for regulators, prosecutors say
- Sam Bankman-Fried deleted tweets and Signal messages after being told to preserve all records, prosecutors said.
- He even deleted a Slack post by FTX's general counsel which said FTX would close, prosecutors said.
Sam Bankman-Fried deleted a number of messages — including a Slack message from FTX's own general counsel that warned the crypto exchange needed to shut down — prosecutors said.
In an updated indictment unveiled on Thursday, prosecutors said that Bankman-Fried had deleted the post by the general counsel of FTX US, who had instructed employees to keep records to assist any investigations. The episode took place in November, according to prosecutors, who didn't specify a date. FTX filed for bankruptcy protection that month.
Bankman-Fried disregarded the general counsel's directive at the time, prosecutors alleged, saying he also deleted some of his tweets in November. Additionally, they said he continued to use the encrypted messaging app Signal, on which users can auto-delete messages.
"In November 2022, the general counsel of FTX.US warned employees that they should preserve documents because of the involvement of regulators, and then posted in a company Slack channel that FTX would need to be shut down," prosecutors wrote in Thursday's superseding indictment. "Bankman-Fried, however, deleted the general counsel's message about FTX being shut down, continued to use Signal messaging, and proceeded to delete some of his own statements on Twitter, including his tweets about customer assets being 'fine.'"
Prosecutors alleged that Bankman-Fried had a practice of talking to employees on Signal using auto-deleting messages, "in part to prevent the preservation of evidence that could be used against him," according to the indictment.
A representative for Bankman-Fried declined to comment on Thursday.
The latest allegations about auto-deleting messages show prosecutors continuing to target what they argue is a pattern of Bankman-Fried trying to evade scrutiny of his communications.
Bankman-Fried's use of messaging apps while he's currently out on bail and on home detention has also been the subject of dispute between his lawyers and government prosecutors in recent weeks.
In January, prosecutors said in a filing that Bankman-Fried had messaged FTX's general counsel, as well as "current and former FTX employees." A New York federal judge has since blocked Bankman-Fried from using messaging apps that auto-delete texts.
Federal prosecutors in New York had originally filed a short indictment against Bankman-Fried in December, lobbing eight counts against him, including for fraud and conspiracy. The new indictment lists 12 counts, including more conspiracy charges.
The updated indictment fleshes out the government's case as they've continued to investigate what went on at FTX.
Top executives in Bankman-Fried's enterprise, including former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang, have pleaded guilty to the government's charges against them and have been cooperating with the investigation.
The financial wrongdoing at FTX was exposed, prosecutors say, by a run on accounts in November of last year. Bankman-Fried commingled funds between Alameda Research, the hedge fund he also controlled, and FTX in order to make it appear as if all accounts were solvent, prosecutors say.
"On or about November 8, 2022, the general counsel of FTX.US, in a Signal chat that included Bankman-Fried and several close associates, demanded: 'I need to know the fucking truth about FTX US right now,'" prosecutors wrote in the new filing.
A day later, prosecutors said, Bankman-Fried said in the same Signal chat that he would move money from Alameda Research to FTX.US to cover the shortfall.