After a strange, strange day of hemming and hawing, FTX founder Sam Bankman-Fried finally agreed to not contest extradition to the U.S., finally giving in to demands he face federal fraud charges.
It follows a haphazard few days where the failed crypto moghul first planned to contest extradition from The Bahamas before reportedly saying on Saturday he would relent. Then during his scheduled Monday court hearing, Bankman-Fried seemed to backtrack, confusing both the court and his attorney handling his affairs in The Bahamas, Jerone Roberts.
Finally on Monday afternoon, The New York Times confirmed from one of the crypto founder’s lawyers that the 30-year-old would agree to extradition. It came after a full day of shunting Bankman-Fried from jail, to court, and then back to jail. Roberts told the Times that Bankman-Fried defied “the strongest possible legal advice” with his decision to get on a plane back to the U.S. The crypto founder’s legal team now has to prepare documents to determine when and where his extradition would take place.
Bankman-Fried has been kept in Bahamas jail since Dec. 12.
Update as of 2:30 p.m. ET:
On Monday, founder of defunct crypto exchange FTX Sam Bankman-Fried decided he would rather remain in The Bahamas than come back to the U.S. to face federal fraud charges.
An attorney representing Bankman-Fried, Jerone Roberts, told a judge in the Bahamas during a two-hour hearing that the crypto founder would not yet agree to U.S. extradition, according to Reuters. Bankman-Fried has reportedly seen the affidavit of charges against him but has yet to see the full list of federal charges, and The New York Times reported Roberts told the judge his client wanted to read the indictment before making a decision on extradition.
He was then sent back to jail without any word of a further court date. His bail hearing in the Bahamas was perviously set for Jan. 17. He has been staying in the jail’s sick bay while receiving check ups in preparation for his extradition. Depending on how things go, his current living situation could be upended, which would send him to live in the notoriously crowded and unsafe “Fox Hill” facility.
On Monday, Roberts reportedly told Magistrate Shaka Serville, who’s presiding over the case, that “whatever trail got him here this morning, it did not involve me.” After conferring with Bankman-Fried, he then told the court the FTX founder needed “a bit more information” on his situation. Bankman-Fried then reportedly phoned his lawyer in New York, Mark Cohen, who’s handling his federal case.
It’s an upset of earlier reports that claimed the maligned crypto founder had planned to no longer contest his extradition.
The FTX founder whose alleged fraud has sent the entire crypto industry reeling may be finally coming home to the U.S. Over the weekend, Reuters first reported the 30-year-old FTX founder was going to return to court in the Bahamas Monday and relinquish his bid to fight extradition to the U.S., an unnamed source familiar with the matter told the outlet.
That reporting was further confirmed by CNBC and The Washington Post, who all cited unnamed sources who said Bankman-Fried was giving up the flight fight after he’s been denied bail in the Bahamas. His next bail hearing was set for Jan. 17, according to the Post.
Though he’s been languishing in the Bahamian facility called “Fox Hill,” which—according to U.S. State Department reports from 2020—is notorious for its poor conditions and overcrowding. So far he’s been living in his own room in the max security wing, according to unnamed sources cited by Bloomberg.
After Bankman-Fried finally legally waives his right to fight extradition, it’s unclear how quickly he would be brought to the U.S., but federal prosecutors likely want to get started on the trial process judging by how fast the U.S. Attorneys Office were able to generate wire fraud, money laundering, and campaign finance violation charges against the once-lauded crypto founder. Bankman-Fried, who often goes by SBF, is also facing further lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.
SBF has been languishing in Bahamian jail for the past week after being held pending U.S. extradition. The Post noted that he’s been spending his time watching movies and reading articles about himself all while hoping he’d be granted bail. He was supposed to testify before congress last week about the collapse of FTX, but the federal charges and subsequent arrest meant he was unable to appear. FTX’s current CEO John Ray III, who’s handling his firm’s bankruptcy, took to the hearing mic to answer questions and proceeded to talk smack about SBF and his crew of “grossly inexperienced and unsophisticated individuals.”
Bankman-Fried has been cited in the fast-moving fraud charges for lying to investors and customers by taking users’ crypto deposited in his exchange and funneling it over to his separate hedge fund Alameda Research. SBF allegedly facilitated those transactions, and even ordered that the company write code to get around FTX’s own interest requirements and allow it to keep a negative balance sheet, even though no other entity was allowed that leeway on his exchange.
As far as the campaign finance violations are concerned, the U.S. Attorney’s Office said the FTX founder had disguised political contributions as coming from other people, though these would exceed the federal limit for campaign donations. U.S. Attorney Damian Williams said during a press conference last week that FTX was “one of the biggest financial frauds in American history.”
Overall, other than the monetary penalties, SBF faces up to 115 years in prison, based on the max penalties for all counts sitting against him. Though of course in these financial fraud cases defendants rarely, if ever, suffer the higher end of penalties. Elizabeth Holmes and Ramesh “Sunny” Balwani, the two at the head of the Theranos fraud case, were just recently sentenced to 11.25 years and 13 years, respectively. Analysts noted that those two received the higher end of sentences for financial fraud, though their original charges were much more severe.
Reuters reported Monday that SBF would likely be brought over to the Metropolitan Detention Center in Brooklyn once he’s finally in the states, though that’s if he’s not brought elsewhere to keep the once-multi-billionaire away from the riff raff and routine overcrowding of New York’s jail system. Bankman-Fried needs to have a bail hearing within 24 hours of returning to the U.S.
Reuters noted that attorneys will likely argue for no bail and declare SBF a flight risk, but knowing other major financial fraudsters like Holmes were able to walk on bail, there’s a good chance SBF will get the same.
Update: 12/19/2022 at 2:30 p.m. ET: This story has been updated with new information from Bankman-Fried’s extradition hearing.
Update: 12/19/2022 at 4:10 p.m. ET: This story has been updated with new information of SBF declaring his intent to face U.S. extradition.