Lawyers for Sam Bankman-Fried are negotiating with federal prosecutors in New York about a bail arrangement that would allow him to avoid custody, people familiar with the case told CNN.
Founder of FTX crypto exchange Bankman-Fried, who oversaw his now-bankrupt crypto empire from a luxury complex in the Bahamas, is expected to return as early as Wednesday to the United States. Federal prosecutors in the United States have charged him with orchestrating “one of the largest financial frauds in American history.”
Once the 30-year-old is in the US, Bankman-Fried will appear before a judge in Manhattan for a bail hearing. The timing of that hearing will depend on when he arrives in New York and is processed.
In the week and a half since his arrest in the Bahamas, Bankman-Fried has been held in a prison that US officials have described as overcrowded, dirty and lacking in medical care. The overcrowded cells often lack mattresses and are “infested with rats, maggots and insects”.
Prosecutors and lawyers for Bankman-Fried are discussing an arrangement for his release, with conditions, that would allow the failed crypto entrepreneur to avoid spending time at the Metropolitan Detention Center. The MDC is a pretrial detention facility that former inmates and rights advocates have described as inhumane, citing frequent shutdowns, overcrowding and power outages that have left it without heat in the middle of winter.
Federal prosecutors accused Bankman-Fried last week of defrauding investors and customers of FTX, which he founded in 2019. If convicted on all eight counts of fraud and conspiracy, he could face up to life in prison.
FTX and its sister trading house, Alameda, both filed for bankruptcy last month after investors rushed to withdraw their deposits from the exchange, triggering a liquidity crisis.
In the weeks following their bankruptcy, FTX’s new CEO has stated publicly that customer funds deposited on the FTX site were commingled with funds at Alameda, which made a series of high-risk speculative bets. The CEO, John Ray III, described the situation at the two companies as “old fashioned embezzlement” in the hands of a small group of “grossly inexperienced and unsophisticated individuals.”
This story is in development. It will be updated.