EXCLUSIVE: Sam Bankman-Fred overturns extradition appeal

(Reuters) – Former FTX CEO Sam Bankman Fried is expected to appear in court in the Bahamas on Monday to overturn his appeal against his extradition to the United States, 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 and accused of engaging in a scheme to defraud FTX clients.

His decision to agree to extradition will pave the way for him to appear in a US court to face charges of using billions of dollars in stolen customer deposits to pay expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.

He will likely be held at the Metropolitan Detention Center in Brooklyn, defense attorney Zachary Margolis-Onuma said upon his arrival in the United States, although some federal defendants are being held in prisons outside New York City due to overcrowding in the facility. .

At the preliminary court hearing in Manhattan, Bankman-Fried will be required to enter a petition and the judge will decide whether to grant him bail, Margolis Onuma said. The attorney added that this hearing must take place within 48 hours of Bankman-Fried’s arrival in the United States, although it is likely to happen 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 unclear location of those funds.

“The missing money gives prosecutors a strong argument that he is a flight risk,” said former federal prosecutor and defense attorney Michael Weinstein. “I would expect that if the judge agreed to release before trial, they would impose very restrictive and onerous conditions.”

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Legal experts told Reuters any trial would likely take more than a year.

A Bankman-Fried spokesperson and a US-based attorney for Bankman-Fried did not immediately respond to requests for comment. A spokesperson for the US Attorney’s Office in Manhattan declined to comment.

It was not immediately clear what prompted Bankman Fried to change its mind and decide not to contest the extradition.

The US State Department said in a 2021 report that conditions at Fox Hill were “harsh,” citing overcrowding, a rodent infestation, and prisoners’ reliance on buckets as toilets. Authorities there say conditions have improved since then.

Bankman-Fried was arrested last Monday in the Bahamas, where he lives and where FTX is headquartered. He was taken into custody on Tuesday at Fox Hill Prison in the Caribbean after District Judge Joy Ann Ferguson-Pratt denied his request to stay at home pending a hearing on his extradition to the United States.

A person familiar with the matter told Reuters at the time that Bankman Fried had filed a new application for bail with the Bahamas Supreme Court on Thursday.

Bankman-Fried amassed a fortune estimated at more than $20 billion as he rode the cryptocurrency boom to build FTX on one of the largest exchanges in the world before it suddenly collapsed this year.

Manhattan’s top federal prosecutor, Damien Williams, called the collapse of FTX one of the “largest financial frauds in American history.” Bankman-Fried acknowledged the failure of risk management at FTX but said he did not believe he had any criminal liability.

Bankman-Fried faces up to 115 years in prison if he is eventually convicted of all eight charges he faces in the US, though any sentence will ultimately be determined by a judge based on a host of factors.

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Reporting by Jasper Ward. Additional reporting by Luke Cohen and Jack Quinn. Written by Luke Cohen. Editing by Chizu Nomiyama, Chris Reese and Jonathan Otis

Our standards: Thomson Reuters Trust Principles.

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