Exclusive: Sam Bankman-Fried to reverse contested handover decision

Dec 17 (Reuters) – Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to fight 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 federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers.

His decision paves the way for him to appear in a US court to pay expenses and debts owed on billions of dollars in stolen customer deposits and investments on behalf of his crypto hedge fund, Alameda Research LLC. .

Upon arrival in the United States, Bankman-Fried could be held at the Metropolitan Detention Center in Brooklyn, although some federal defendants are held in jails outside New York City because of overcrowding at the facility, defense attorney Zachary Margulis-Onuma said. .

During her initial court hearing in Manhattan, Bankman-Fried will be asked to enter a plea and a judge will make a decision on bail, Margulis-Onuma said. Such a hearing would have to take place within 48 hours of Bankman-Fried’s arrival in the United States, though the attorney added that it could happen sooner.

Prosecutors will argue that Bankman-Fried is a flight risk and should be detained because so much money is involved in the case and the whereabouts of those funds is unclear.

“The missing money gives prosecutors strong arguments that he’s a flight risk,” said Michael Weinstein, a former federal prosecutor and white-collar defense attorney. “If a judge were to grant pretrial release, I would expect them to impose very restrictive and strict conditions.”

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Any trial could take more than a year, legal experts told Reuters.

Neither a spokeswoman for Bankman-Fried nor a U.S.-based lawyer immediately responded to requests for comment. A spokeswoman for the U.S. Attorney’s Office in Manhattan declined to comment.

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

In a 2021 report, the US State Department called conditions at Fox Hill “atrocious”, citing overcrowding, rodent infestations and inmates’ reliance on buckets as toilets. Officials said that the situation has improved since then.

Bankman-Fried was arrested last Monday in the Bahamas, where she lives and where FTX is based. He was remanded in custody in the Caribbean nation’s Fox Hill prison on Tuesday after Chief Magistrate JoyAnn Ferguson-Broad rejected his request to remain at home while he awaits an extradition hearing to the United States.

Bankman-Fried made a new bail application in the Bahamas Supreme Court on Thursday, a person familiar with the matter told Reuters at the time.

Bankman-Fried amassed a fortune worth more than $20 billion as he rode the cryptocurrency boom to build FTX into one of the world’s largest exchanges before suddenly collapsing this year.

Damian Williams, a top federal prosecutor in Manhattan, described FTX’s collapse as one of the “biggest financial frauds in American history.” Bankman-Fried has admitted to risk management failures at FTX, but has said he does not believe he has any criminal responsibility.

Bankman-Fried faces up to 115 years in prison if ultimately convicted of all eight charges she faces in the United States, although any sentence will ultimately be determined by a judge based on several factors.

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Report by Jasper Ward; Additional reporting by Luke Cohen and Jack Quinn; Written by Luke Cohen; Editing by Chisu Nomiyama, Chris Reese and Jonathan Otis

Our Standards: Thomson Reuters Trust Principles.

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