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Exclusive: Sam Bankman-Fried reverses decision to contest extradition

Dec 17 (Reuters) – Former FTX chief Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said the case. on Saturday.

The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday, accused of participating in a scheme to defraud FTX customers.

His decision to agree to extradition will pave the way for him to appear in a US court to face charges of using billions of dollars in stolen customer deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC. .

Upon arrival in the United States, Bankman-Fried will likely be held at the Metropolitan Detention Center in Brooklyn, although some federal defendants are held in prisons just outside New York City due to overcrowding at the facility, defense attorney Zachary Margulis-Ohnuma said.

At her first court appearance in Manhattan, Bankman-Fried would be asked to enter a plea and a judge would make a decision on bail, Margulis-Ohnuma said. The lawyer added that such a hearing must take place within 48 hours of Bankman-Fried’s arrival in the United States, although it is likely to be sooner.

Prosecutors are likely to argue that Bankman-Fried is a flight risk and should remain in custody because of the large sums of money involved in the case and the unclear location of those funds.

“The missing money gives prosecutors a strong case that he is a flight risk,” said former federal prosecutor and defense attorney Michael Weinstein. “I would expect that if a judge grants pretrial release, they will impose very restrictive and onerous conditions.”

Any trial is likely more than a year away, legal experts told Reuters.

Neither a spokesman nor a US-based lawyer for Bankman-Fried immediately responded to requests for comment. A spokesman for the U.S. attorney’s office in Manhattan declined to comment.

It was not immediately clear what prompted Bankman-Fried to change her mind and decide not to contest extradition.

The US State Department said in a 2021 report that conditions at Fox Hill were “harsh”, citing overcrowding, rodent infestations and prisoners relying on buckets as toilets. The authorities there say that conditions have since improved.

Bankman-Fried was arrested last Monday in the Bahamas, where he lives and where FTX is based. He was remanded to the Caribbean country’s Fox Hill prison on Tuesday after Chief Justice JoyAnn Ferguson-Pratt rejected his request to remain at home while he awaited a hearing on his extradition to the United States.

Bankman-Fried had filed a new bail application with the Supreme Court of the Bahamas on Thursday, a person familiar with the matter told Reuters at the time.

Bankman-Fried amassed a fortune worth over $20 billion as he rode a cryptocurrency boom to build FTX into one of the world’s largest exchanges before it abruptly collapsed this year.

Damian Williams, the top federal prosecutor in Manhattan, described the collapse of FTX as one of the “biggest financial frauds in American history.” Bankman-Fried has acknowledged risk management failures at FTX, but has said he did not believe he had any criminal responsibility.

Bankman-Fried faces up to 115 years in prison if ultimately convicted of all eight counts he faces in the United States, although any sentence will ultimately be determined by a judge based on a number of factors.

Reporting by Jasper Ward; Additional reporting by Luc Cohen and Jack Queen; Written by Luc Cohen; Editing by Chizu Nomiyama, Chris Reese and Jonathan Oatis

Our standards: Thomson Reuters Trust Principles.

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