FTX founder Sam Bankman-Fried (2nd L) is led away in handcuffs by officers from the Royal Bahamas Police Force in Nassau, Bahamas on December 13, 2022.
Mario Duncanson | AFP | Getty Images
FTX founder and former CEO Sam Bankman-Fried will no longer contest extradition to the United States, a reversal just days after he was detained in a Bahamian jail awaiting a hearing, a person familiar with the matter told CNBC.
The former crypto-billionaire will appear in Bahamian court this Monday to formally waive his extradition rights, paving the way for federal authorities to secure his return to the United States
Extradition between the Bahamas and the United States is codified by a 1[ads1]991 treaty. In practice, the process takes months, if not years, to complete because the accused have many chances to appeal. Bankman-Fried’s legal team had initially said they planned to fight extradition. The change of heart would move up the timeline of Bankman-Fried’s federal trial significantly.
The 30-year-old MIT graduate was originally scheduled for his next hearing in February 2023.
A representative for Bankman-Fried declined to comment.
Bankman-Fried was indicted Monday in federal court in New York on charges of wire fraud, securities fraud, conspiracy to defraud the United States and money laundering. If convicted, he could face the rest of his life in prison. The former FTX CEO also faces concurrent charges from the Securities and Exchange Commission and the Commodity Futures Trading Commission for similar allegations that he worked to defraud FTX customers out of billions of dollars since 2019, the year the exchange was founded.
At the heart of Bankman-Fried’s empire was Alameda Research, a crypto hedge fund that federal regulators allege used FTX client money to run trades that lost billions of dollars.
FTX’s collapse was triggered when reporting by CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried’s hedge fund Alameda Research used as collateral for billions in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, spurring a massive withdrawal of funds. The company froze assets and declared bankruptcy days later. Charges by the SEC and CFTC indicated that FTX had commingled client funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and that billions in client deposits had been lost along the way.