Dec 17 (Reuters) – Former FTX CEO Sam Bankman-Fried will appear in court in the Bahamas on Monday to overturn his decision to contest extradition to the U.S. where he faces fraud charges, a person familiar with the matter said. on Saturday.
The 30-year-old cryptocurrency mogul was indicted in Manhattan federal court on Tuesday, accused of conspiring to defraud FTX customers by using billions of dollars in stolen deposits to pay expenses and debts and invest in his crypto hedge fund. Foundation, “Alameda Research” LLC.
His decision to agree to extradition will pave the way for him to appear in a US court to face wire fraud, money laundering and campaign finance charges.
Upon her arrival in the United States, Bankman-Fried will likely be held at the Metropolitan Detention Center in Brooklyn, although some federal defendants are held in prisons outside New York because of overcrowding at the facility, defense attorney Zachary Margulies-Ohnuma said. .
At her preliminary hearing in Manhattan, Bankman-Fried will be asked to enter a plea and a judge will make a bail decision, Margulies-Ohnuma said. The attorney added that such a hearing would have to take place within 48 hours of Bankman-Fried’s arrival in the United States, though it would likely be sooner.
Prosecutors are likely to 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 whereabouts of those funds.
“The missing money gives prosecutors a strong case that he is a flight risk,” said Michael Weinstein, a former federal prosecutor and white-collar defense attorney. “I expect that if the judge issues a restraining order, they will impose very restrictive and severe conditions.”
Any trial is likely to last more than a year, legal experts told Reuters.
Neither a spokeswoman nor a U.S. attorney for Bankman-Fried immediately responded to requests for comment. Bankman-Fried acknowledged risk management failures at FTX but said she did not believe she was criminally responsible.
A representative of the US Attorney’s Office in Manhattan declined to comment.
“THE BIGGEST FINANCIAL CORRUPTIONS IN AMERICAN HISTORY”.
It was not immediately clear what led Bankman-Fried to change his mind and decide not to contest extradition.
He was detained at Fox Hill Prison in the Bahamas on Tuesday after Chief Magistrate Joy Ann Ferguson-Pratt denied his request to remain at home pending an extradition hearing.
The US State Department said in a 2021 report that conditions at Fox Hill were “atrocious”, citing overcrowding, rodent infestations and inmates relying on buckets as toilets. Authorities there say conditions have improved.
Bankman-Fried amassed a fortune of more than $20 billion as he rode the cryptocurrency boom to build FTX into one of the world’s largest exchanges. His arrest last Monday in the Bahamas, where he lives and where FTX is based, came just a month after the exchange collapsed amid a flurry of customer withdrawals.
Manhattan’s top federal attorney, Damian Williams, described the collapse of FTX as “one of the largest financial frauds in American history.” He described the office’s investigation as ongoing and urged people with knowledge of wrongdoing at FTX or Alameda to cooperate.
One of FTX’s chief executives, Ryan Salame, told Bahamas securities regulators on Nov. 9 that assets belonging to the exchange’s clients were transferred to Alameda to cover hedge fund losses, according to a document released as part of FTX’s bankruptcy proceedings. Delaware.
FTX filed for bankruptcy on Nov. 11, the same day Bankman-Fried stepped down as CEO.
Salameh’s attorney did not immediately respond to a request for comment.
Reporting by Jasper Ward; Additional reporting by Luke Cohen and Jack Quinn; Written by Luke Cohen; Editing by Chizu Nomiyama, Chris Reese, Amy Stevens and Jonathan Oatis
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