Sam Bankman-Fried will now surrender himself for extradition before Bahamian court Monday: Source

FTX founder Sam Bankman-Fried (2nd L) is taken in handcuffs by Royal Bahamas Police Force officers in Nassau, Bahamas on December 13, 2022.

Mario Duncanson | AFP | Getty Images

FTX founder and former CEO Sam Bankman-Fried will no longer contest extradition to the United States, a volte-face just days after he was sent back to jail in the Bahamas pending a hearing, said a person familiar with the matter told CNBC.

The former crypto billionaire will appear in court in the Bahamas on Monday to formally waive his extradition rights, clearing the way for federal authorities to secure his return to the United States.

Extradition between the Bahamas and the United States is codified by a 1991 treaty. In practice, the process takes months or even years, as the accused has many chances to appeal. Bankman-Fried’s legal team initially said they planned to fight extradition. The U-turn would significantly increase the timeline for Bankman-Fried’s federal trial.

The 30-year-old MIT graduate was originally scheduled for his next hearing in February 2023.

A Bankman-Fried representative declined to comment.

Bankman-Fried was charged Monday in federal court in New York with wire fraud, securities fraud, conspiracy to defraud the United States and money laundering. If convicted, he could spend the rest of his life in prison. The former FTX CEO also faces concurrent charges from the Securities and Exchange Commission and the Commodity Futures Trading Commission over similar allegations that he defrauded FTX customers of billions of dollars since 2019, the year of the establishment of the stock exchange.

At the heart of Bankman-Fried’s empire was Alameda Research, a crypto hedge fund that federal regulators said used money from FTX clients to engage in trades that lost billions of dollars.

FTX’s collapse was precipitated when reports by CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried hedge fund Alameda Research has used as collateral for billions in crypto loans. Binance, a rival exchange, announced that it would sell its stake in FTT, prompting a massive withdrawal of funds. The company froze assets and declared bankruptcy a few days later. The SEC and CFTC charges said FTX mixed client funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and billions of client deposits were lost along the way.

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