Still in the United States, Bankman-Fried, 30, faces multiple criminal and civil charges, including conspiracy, fraud, money laundering and violating campaign finance laws. Legal experts say his extradition could speed up the resolution of criminal and civil cases being pursued by the US government.
Eric Lewis, a lawyer and extradition expert, said Bankman-Fried’s decision to go ahead with extradition may have been because he did not want to spend months in a Bahamian prison, where conditions are notoriously poor. While Bankman-Fried has a legal right to challenge extradition, prosecutors may view it as a disadvantage “when it comes time to consider both bail and possible sentencing.”
Prosecuting the case in the U.S. will hopefully help deter others who might be tempted to do what Bankman-Fried is accused of, said Carl Tobias, a law professor at the University of Richmond. It would also show that the U.S. Department of Justice and regulators charged with protecting consumers from alleged fraud are doing “everything possible to prevent that type of behavior,” he added.
Tobias noted that if the disgraced former CEO continues to agree to extradition, the Southern District could file a lawsuit and take steps to move the case more quickly to trial and final resolution, “which would be beneficial to the US government in seeking justice; defrauded FTX customers and the wider public,” he added.
Bankman-Fried’s legal team is preparing the necessary legal documents and said Bankman-Fried is expected back in court this week.
Once he is returned to the United States, the crypto entrepreneur will appear in federal court for the Southern District of New York.
Lewis, an extradition expert, said Bankman-Fried will likely face a bail hearing if he is returned to the United States. Getting out on bail could be difficult, he said, given that Bankman-Fried is a high-profile defendant, faces serious prison time and may have access to significant funds.
Bankman-Fried, wearing a navy blue suit and white button-down shirt, sat on a wooden bench during Monday morning’s court hearing, where he was to tell Bahamian authorities that he ultimately did not want to fight extradition.
But the hearing lasted only about 10 minutes, after Bankman-Fried’s local defense attorney, Jeron Roberts, said he was going to the jail to talk to his client about the possibility of extradition when he learned he was in court. Roberts denounced the trial as “premature” and without his “any involvement.”
In a heated presentation, Roberts claimed she had not been briefed on the proceedings and initially asked for a 45-minute break to confer with Bankman-Fried. He then asked for a copy of the indictment filed by U.S. prosecutors so his client would read and know “what he’s up against,” as well as additional time to speak with his client and his legal representatives in the U.S.
Prosecutor Franklin Williams sentenced Roberts, saying he did not want to take part in “the spectacle that is unfolding”.
The 30-year-old former tycoon was arrested last Monday at his luxury apartment in Nassau at the request of the US government. Then he was transferred to the country’s only prison, Fox Hill, which is known for its poor and unsanitary conditions.
Bankman-Fried spent his days watching movies and reading the news, mostly about himself, according to a prison official who had direct contact with him.
Meanwhile, the disgraced former CEO had hoped his lawyers would be able to secure bail after a judge denied it even last week on the grounds that Bankman-Fried was at risk because of his entry. “significant resources”. Then his lawyers submitted a new application for bail to the Supreme Court of the Bahamas, which granted the hearing on January 17.
On Friday, he considered giving up his fight against extradition to be brought to the United States to face charges, The Post reported.
A day after his arrest, Bankman-Fried was indicted in US federal court on charges that he was involved in a scheme to defraud FTX clients by transferring their crypto assets for the debts and expenses of his hedge fund, Alameda Research. He was also charged with using client funds to invest in other companies and make political donations. And now, it seems, most of the money is missing.
“This is one of the largest financial frauds in American history,” U.S. Attorney Damian Williams said last week in New York. The alleged fraud wiped out “billions of dollars in customer value overnight,” he added.
Until recently, FTX was one of the world’s largest cryptocurrency exchanges, with a market capitalization of $32 billion. The company had created a veneer of legitimacy by winning investment from high-profile venture firms, paying to have its logo on Major League Baseball umpires’ uniforms and spending lavishly on Super Bowl advertising.
Bankman-Fried also donated tens of millions of dollars to politicians, becoming the second-largest Democratic donor in the 2022 midterm elections and building a significant presence in Washington.
But now, the spectacular fall of the company and its founder has deepened the sense that the crypto bubble has burst, wiping out billions of dollars in investments made by ordinary people, pension funds, venture capitalists and traditional companies.
In addition to the criminal charges, Bankman-Fried also faces civil lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Despite the seemingly complicated nature of the circumstances surrounding FTX’s collapse, the cause was “not complicated,” FTX’s new CEO, John J. Ray III. “This is just plain old embezzlement,” the corporate bankruptcy expert said in testimony before the House Financial Services Committee.
Gerrit De Vink in San Francisco and Julian Mark in Washington contributed to this report.