Exclusive: Sam Bankman-Fried to reverse decision on challenging extradition

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

The 30-year-old cryptocurrency mogul was arraigned in Manhattan federal court on Tuesday and charged with participating in a scheme to defraud FTX clients by using billions of dollars in stolen deposits to pay off expenses and debts and make investments for your crypto hedge. fund, Alameda Research LLC.

His decision to consent to extradition would pave the way for him to appear in US court to face charges of wire fraud, money laundering and campaign finance.

Upon arrival in the United States, Bankman-Fried would likely be held at the Metropolitan Detention Center in Brooklyn, though some federal defendants are being held in jails outside of New York City due to overcrowding at the facility, he said. defense attorney Zachary Margulis-Ohnuma. .

At her initial court hearing in Manhattan, Bankman-Fried would be asked to plead guilty and a judge would make a decision on bail, Margulis-Ohnuma said. The lawyer added that such a hearing must be held within 48 hours of Bankman-Fried’s arrival in the United States, although it would probably be sooner.

Prosecutors will likely argue that Bankman-Fried is a flight risk and should remain in custody due to 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 white-collar defense attorney Michael Weinstein. “I hope that if a judge grants parole, he will impose very restrictive and onerous conditions.”

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

Neither a spokesman nor a US attorney for Bankman-Fried immediately responded to requests for comment. Bankman-Fried has acknowledged failings in risk management at FTX, but has said it does not believe it bears criminal liability.

A spokesman for the US Attorney’s Office in Manhattan declined to comment.


It was not immediately clear what led Bankman-Fried to change her mind and decide not to challenge the extradition.

He was remanded to Fox Hill Prison in the Bahamas on Tuesday after Chief Magistrate JoyAnn Ferguson-Pratt refused his request to remain at home while awaiting a hearing on his extradition.

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

Bankman-Fried amassed a fortune valued at more than $20 billion while taking advantage of the cryptocurrency boom to build FTX into one of the largest exchanges in the world. His arrest last Monday in the Bahamas, where he lives and where FTX is headquartered, came just a month after the exchange collapsed amid a spate of client withdrawals.

Damian Williams, the top federal prosecutor in Manhattan, described the FTX collapse as one of the “largest financial frauds in American history.” He described the bureau’s investigation as ongoing and urged people with knowledge of wrongdoing at FTX or Alameda to cooperate.

A senior FTX executive, Ryan Salame, told securities regulators in the Bahamas on Nov. 9 that assets belonging to exchange clients were transferred to Alameda to cover the hedge fund’s losses, according to a document made public. as part of FTX’s bankruptcy proceedings in Delaware.

FTX filed for bankruptcy on November 11, the same day Bankman-Fried stepped down as CEO.

A lawyer for Salame did not immediately respond to a request for comment.

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

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