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

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

The 30-year-old cryptocurrency tycoon was indicted in federal court in Manhattan on Tuesday and accused of participating in a scheme to defraud FTX customers.

His decision to consent to extradition would pave the way for him to appear in a US court to face charges of using billions of dollars in stolen client deposits to pay expenses and debts and to make investments on behalf of 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, although some federal defendants are being held in jails just outside New York due to overcrowding at the facility, a said defense attorney Zachary Margulis-Ohnuma. .

At his first hearing in Manhattan, Bankman-Fried would be asked to enter a plea and a judge would make a decision on bail, Margulis-Ohnuma said. The lawyer added that such a hearing must take place within 48 hours of Bankman-Fried’s arrival in the United States, although that is likely 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 uncertain whereabouts of those funds.

“The missing money gives prosecutors a strong case that he’s at risk of fleeing,” said former federal prosecutor and white-collar defense attorney Michael Weinstein. “I expect that if a judge grants temporary release, he will impose very restrictive and onerous conditions.”

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

Neither a spokesperson nor a U.S. attorney for Bankman-Fried immediately responded to requests for comment. A spokesperson for the U.S. Attorney’s Office in Manhattan declined to comment.

It was not immediately clear what caused Bankman-Fried to change his mind and decide not to contest the extradition.

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

Bankman-Fried was arrested last Monday in the Bahamas, where he lives and where FTX is based. He was returned to Fox Hill prison in the Caribbean country on Tuesday after Chief Magistrate JoyAnn Ferguson-Pratt denied his request to stay at home pending a hearing on his extradition to the United States.

Bankman-Fried had filed a new bail application in the Bahamas Supreme Court on Thursday, a person familiar with the matter told Reuters at the time.

Bankman-Fried amassed a fortune valued at more than $20 billion as he oversaw a cryptocurrency boom to make FTX one of the biggest exchanges in the world before it abruptly collapsed this year.

Damian Williams, Manhattan’s top federal prosecutor, described FTX’s collapse as one of the “biggest financial frauds in American history.” Bankman-Fried acknowledged failures in risk management at FTX, but said he did not believe he had criminal liability.

Bankman-Fried faces up to 115 years in prison if he is ultimately convicted of the eight charges he faces in the United States, although any sentence will ultimately be determined by a judge based on a series of factors.

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

Our standards: The Thomson Reuters Trust Principles.

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