Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said on Saturday.
The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers.
His decision to consent to extradition would pave the way for him to appear in U.S. court to face charges of using billions of dollars in stolen customer deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.
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 at jails just outside New York City due to overcrowding at the facility, said defense lawyer Zachary Margulis-Ohnuma.
At his initial court hearing in Manhattan, Bankman-Fried would be asked to enter a plea and a judge would make a determination on bail, Margulis-Ohnuma said. The attorney added that such a hearing must take place within 48 hours of Bankman-Fried’s arrival in the United States, though it would likely be sooner.
Prosecutors will likely argue that Bankman-Fried is a flight risk and should remain in custody because of the large sums of money involved in the case and the unclear location of those funds.
“The missing money gives prosecutors strong arguments that he is a flight risk,” said former federal prosecutor and white-collar defense attorney Michael Weinstein. “I expect that if a judge grants pretrial release, they would impose very restrictive and onerous conditions.”
Any trial is likely more than a year away, legal experts told Reuters.
Neither a spokesman nor a U.S.-based lawyer for Bankman-Fried immediately responded to requests for comment. A spokesman for the U.S. Attorney’s Office in Manhattan declined to comment.
It was not immediately clear what prompted Bankman-Fried to change his mind and decide not to contest extradition.
The U.S. 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 there say conditions have since improved.
Bankman-Fried was arrested last Monday in the Bahamas, where he lives and where FTX is based. He was remanded on Tuesday to the Caribbean country’s Fox Hill prison after Chief Magistrate JoyAnn Ferguson-Pratt rejected his request to remain at home while awaiting a hearing on his extradition to the United States.
Bankman-Fried had made a new bail application before the Bahamas Supreme Court on Thursday, a person familiar with the matter told Reuters at the time.
Bankman-Fried amassed a fortune valued at over $20 billion as he rode a cryptocurrency boom to build FTX into one of the world’s largest exchanges before it abruptly collapsed this year.
Damian Williams, the top federal prosecutor in Manhattan, described the collapse of FTX as one of the “biggest financial frauds in American history.” Bankman-Fried has acknowledged risk management failures at FTX but has said he did not believe he had any criminal liability.
Bankman-Fried faces up to 115 years in prison if ultimately convicted of all eight counts he faces in the United States, though any sentence would ultimately be determined by a judge based on a range of factors. (Reporting by Jasper Ward; Additional reporting by Luc Cohen and Jack Queen; Writing by Luc Cohen; Editing by Chizu Nomiyama, Chris Reese and Jonathan Oatis)