Sam Bankman-Fried agrees to extradition from the Bahamas to face US charges

Back in the United States, Bankman-Fried, 30, faces multiple criminal and civil charges — he is accused of conspiracy, fraud, money laundering and violating campaign finance laws. His extradition could speed up the resolution of the criminal and civil cases the US government is pursuing, according to legal experts.

Eric Lewis, a lawyer and extradition expert, said Bankman-Fried’s decision to go along with extradition may have been because he did not want to spend months in a Bahamian prison, where conditions are notoriously poor. While Bankman-Fried has the legal right to challenge the extradition, prosecutors may view it negatively “when it comes time to look at both bail and a potential sentence.”

Pursuing the case on American soil will hopefully help deter others who might be tempted to do what Bankman-Fried is accused of, said Carl Tobias, a law professor at the University of Richmond. It would also show that the U.S. Department of Justice and regulatory agencies charged with protecting consumers from alleged fraud are doing “everything possible to prevent that type of behavior,” he added.

Tobias pointed out that if the disgraced former CEO continued to agree to extradition, the Southern District could set the trial and take steps to move the case more quickly to trial and final resolution, “which would be beneficial to the US government in seeking justice , to defrauded FTX customers and to the wider public,” he added.

Bankman-Fried’s legal team is preparing the necessary legal documents and said Bankman-Fried is expected to return to court this week.

Once returned to the United States, the crypto entrepreneur will be arraigned in federal court for the Southern District of New York.

Lewis, the extradition expert, said Bankman-Fried will likely face a bail hearing if he returns to the United States. Getting out on bail could be difficult, he said, given that Bankman-Fried is a high-profile defendant, who faces a heavy prison sentence and may have access to significant funds.

Bankman-Fried, dressed in a navy blue suit and a white button-down shirt, sat on a wooden bench during the court hearing Monday morning, where he expected to tell Bahamian authorities that he did not want to fight extradition.

But the session lasted only about 10 minutes, after Jerone Roberts, a local defense attorney for Bankman-Fried, said he was on his way to the jail to talk to his client about the possibility of extradition when he learned he was in court. Roberts denied that the proceedings were “too soon” and without him taking “any part in it”.

In a heated presentation, Roberts claimed he had not been briefed on the proceedings and initially requested a 45-minute recess to confer with Bankman-Fried. He then asked for a copy of the indictment filed by U.S. prosecutors so his client could read and know “what he’s facing,” as well as additional time to speak with the client and his legal representatives in the United States.

Prosecutor Franklyn Williams chastised Roberts, saying he did not want to be part of “a drama unfolding.”

The 30-year-old ex-mogul was arrested last Monday at his luxury apartment in Nassau at the request of the US government. He was then transferred to the country’s only prison, Fox Hill, which is notorious for its poor and unsanitary conditions.

According to a prison official who has had direct contact with him, Bankman-Fried has spent the days since watching movies and reading news, mostly about himself.

During this time, the disgraced ex-CEO held out hope that his lawyers would be able to secure him bail after it was initially denied last week by a judge on the grounds that Bankman-Fried was a flight risk due to of his access to “significant resources”. His lawyers then filed a new application for bail with the Bahamas Supreme Court, which granted a hearing on January 17.

By Friday, he was considering giving up his fight against extradition so he could be brought to the United States to face charges, The Post reported.

Bankman-Fried was indicted in US federal court a day after his arrest for participating in schemes to defraud FTX clients by funneling their crypto assets to pay for debts and expenses incurred by his hedge fund, Alameda Research. He was also charged with using client funds to invest in other companies and make political donations. And now it seems that much of the money is missing.

“This is one of the biggest financial frauds in American history,” U.S. Attorney Damian Williams said last week in New York. The alleged fraud destroyed “billions of dollars in customer value overnight,” he added.

Until recently, FTX was one of the world’s largest cryptocurrency exchanges, valued at $32 billion. The company had established a veneer of legitimacy, won investment from respected venture capital firms, paid to have its logo on the uniforms of Major League Baseball umpires and spent lavishly on Super Bowl advertising.

Bankman-Fried had also donated tens of millions of dollars to politicians, becoming the second largest Democratic donor in the 2022 midterm elections and building a prominent position for herself in Washington.

But now the spectacular fall of the company and its founder has deepened a sense that the crypto bubble has burst, wiping out billions of dollars of investments made by ordinary people, pension funds, venture capitalists and traditional companies.

In addition to criminal charges, Bankman-Fried also faces civil lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Despite the seemingly complex nature of the circumstances surrounding FTX’s collapse, the cause was “not sophisticated whatsoever,” John J. Ray III, FTX’s new chief executive, told lawmakers this week. “This is plain old embezzlement,” the corporate resolution expert said in testimony before the House Financial Services Committee.

Gerrit De Vynck in San Francisco and Julian Mark in Washington contributed to this report.