Lawyers for Sam Bankman-Fried are negotiating with federal prosecutors in New York on a bail deal that would allow him to avoid detention, people familiar with the matter told CNN.
Crypto exchange FTX founder Bankman-Fried, who oversaw his now bankrupt crypto empire from a luxury resort in the Bahamas, is set to return to the United States as early as Wednesday. US federal prosecutors accused him of orchestrating “one of the greatest financial frauds in American history.
Once the 30-year-old is in the United States, Bankman-Fried will appear before a Manhattan judge for a bail hearing. The timing of that hearing will depend on when he arrives in New York and is processed.
In the week and a half since his arrest in the Bahamas, Bankman-Fried has been held in a prison that US officials have described as overcrowded, filthy and lacking in medical care. Its overcrowded cells often lack mattresses and are “infested with rats, maggots and insects”.
Prosecutors and lawyers for Bankman-Fried are discussing an arrangement for his release, with conditions, that would allow the bankrupt crypto entrepreneur to avoid spending time at the Metropolitan Detention Center. The MDC is a temporary detention center that former detainees and rights defenders have described as inhumanciting frequent closures, overcrowding and power outages that left it without heating in mid-winter.
Last week, federal prosecutors charged Bankman-Fried with defrauding investors and clients of FTX, which he founded in 2019. If convicted on all eight counts of fraud and conspiracy, he faces life imprisonment.
FTX and its sister trading firm, Alameda, both filed for bankruptcy last month after investors rushed to withdraw their deposits from the exchange, triggering a liquidity crunch.
In the weeks following their bankruptcy, FTX’s new CEO publicly stated that client funds deposited on the FTX site were commingled with funds from Alameda, which made a number of high-risk speculative bets. CEO John Ray III described the situation of the two companies as “old fashioned embezzlement” at the hands of a small group of “grossly inexperienced and unsophisticated individuals”.
This story is developing. It will be updated.