Justice Department wants Sam Bankman-Fried to use a flip phone for the rest of his bail

FTX founder and former CEO Sam Bankman-Fried may be stuck using a dumb phone for the foreseeable future. In a letter seen by Bloomberg, prosecutors involved in his criminal case said Friday that Bankman-Fried’s lawyers had agreed to modify the terms of his bail agreement. Provided the judge overseeing the case agrees to the changes, SBF will be restricted to using a “non-smartphone” without internet connectivity. Unless a lawyer is present, he will also be forbidden from contacting current or former FTX and Alameda Research employees. Additionally, SBF won’t be able to use encrypted messaging apps, including Signal.

The proposed restrictions come after Bankman-Fried allegedly attempted to contact the general counsel of FTX’s US subsidiary over Signal at the start of the year. “I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other,” he said in one message, according to the Justice Department.

Earlier in the week, Nishad Singh, FTX’s former director of engineering, pleaded guilty to federal fraud and conspiracy charges. Singh is the third of Bankman-Fried’s inner circle to cooperate with prosecutors in the case against him. At the end of last year, former Alameda Research CEO Caroline Ellison and FTX co-founder Zixiao "Gary" Wang pleaded guilty to fraud charges and said they would cooperate with investigators.

According to Bloomberg, District Judge Lewis Kaplan threatened to revoke Bankman-Fried’s bail and send him to jail before the start of his trial after learning that the disgraced entrepreneur may have influenced potential witnesses. Last month, Kaplan also banned Bankman-Fried from using a virtual private network (VPN) after his lawyers said he used one to watch a football game. According to Reuters, Kaplan said he did not want SBF "loose in this garden of electronic devices.”

Under the modified bail agreement, SBF would be allowed to use a laptop to surf the web, but his access would be filtered through a VPN that would limit him to two categories of websites. One category would include resources his defense team says are critical to his case. The other features a list of 23 websites SBF could use to order food, read the news and watch streaming content. No word yet if the proposed restrictions would limit him from playing League of Legends. 

Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, arrives to the Manhattan federal court in New York City, U.S. February 16, 2023. REUTERS/Eduardo Munoz     TPX IMAGES OF THE DAY

FBI says it has 'contained' a cybersecurity incident on its network

The FBI is dealing with another attack on its digital infrastructure, although the severity isn't yet clear. The law enforcement agency tellsCNN it has "contained" a recent cybersecurity incident on its network. The bureau isn't commenting on the perpetrator, scope or damage, but says it's gathering "additional information."

Sources speaking to CNN claim the intruders targeted a system used to investigate child sexual abuse material (CSAM). The incident involved the high-profile New York Field Office, according to the insiders. Investigators are said to still be investigating the origins of the breach.

This isn't the first such incident in recent memory. In November 2021, an attacker compromised FBI email servers and sent thousands of messages falsely claiming recipients were victims of data breaches. The campaign tried to blame the imaginary attacks on dark web security firm operator Vinny Troia. The FBI never named a culprit, but did patch the flaw that allowed the intrusion.

This may not necessarily be a serious violation. Other campaigns, such as the 2020 Treasury breach and the SolarWinds hack, are known to have exposed sensitive email contacts for officials. Still, the data reportedly at risk makes the attack concerning, even if the impact may be relatively limited.

The FBI (Federal Bureau of Investigation) logo is seen on a Redmi phone screen in this photo illustration in Warsaw, Poland on 23 August, 2022. (Photo by STR/NurPhoto via Getty Images)