Exclusive: Sam Bankman-Fried backtracks on decision to challenge extradition

Exclusive: Sam Bankman-Fried backtracks on decision to challenge extradition
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Dec 17 (Reuters) – Former FTX chief executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to overturn an appeal against his extradition to the United States on fraud charges. Saturday.

He was a 30-year-old cryptocurrency tycoon charged in federal court Tuesday in Manhattan and is charged with a scheme to defraud FTX clients by using billions of dollars in stolen deposits to pay expenses and debts and invest in crypto hedge fund Alameda Research LLC.

His consent to extradition would allow him to face fraud, money laundering and campaign finance charges in a US court.

Defense attorney Zachary Margulis-Ohnuma said that after her 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 jails outside New York City due to overcrowding at the facility. .

Margulis-Ohnuma said Bankman-Fried will be asked to enter a plea at a preliminary hearing in Manhattan, and a judge will decide on bail. The attorney added that such a hearing would have to take place within 48 hours of Bankman-Fried’s arrival in the United States, though it would be sooner.

Prosecutors will likely argue that Bankman-Fried is a flight risk and should remain in jail because of the large amount of money involved in the case and the unclear whereabouts of those funds.

“The missing money gives prosecutors a strong argument that he was a flight risk,” said Michael Weinstein, a former federal prosecutor and white-collar defense attorney. “I expect that if the judge releases him before the trial, they will impose very restrictive and severe conditions.”

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

A spokeswoman for Bankman-Fried declined to comment. Bankman-Fried admitted to risk management failures at FTX, but said he did not believe he was criminally responsible.

A representative of 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 contest extradition.

She was sent to Fox Hill Prison in the Bahamas on Tuesday after Chief Justice JoyAnn Ferguson-Pratt denied her request to remain at home pending an extradition hearing.

In a 2021 report, the US State Department described conditions at Fox Hill as “severe”, citing overcrowding, rodent infestations and inmates being kept in toilet-like buckets. Authorities there say that conditions have improved since then.

Bankman-Fried has amassed more than $20 billion in wealth by riding the cryptocurrency boom to make FTX one of the world’s largest exchanges. His arrest last Monday in the Bahamas, where he lives and is home to FTX, comes just a month after the exchange collapsed amid a wave of customer withdrawals.

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

One of FTX’s top executives, Ryan Salame, told securities regulators in the Bahamas in November. Assets belonging to the exchange’s clients were transferred to Alameda to cover the hedge fund’s losses, according to a filing released as part of FTX’s bankruptcy filing in Delaware.

In November, FTX declared bankruptcy. 11, on the same day, Bankman-Fried resigned as CEO.

Salamen’s attorney 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; Edited by Chizu Nomiyama, Chris Reese, Amy Stevens, and Jonathan Oatis

Our standards: Thomson Reuters Trust Principles.

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