By Nathan Ferguson
Sam Bankman-Fried, ex-CEO of the fallen crypto exchange FTX, could appear in a Bahamian court on Monday as he seeks to reverse his earlier decision to challenge any extradition attempts to the US. On Tuesday, federal prosecutors indicted Bankman-Fried in Manhattan and accused him of running a scheme to defraud FTX users.
He plans to allow his extradition and go before a US court to defend himself against charges of using stolen customers’ money for trading purposes through his crypto hedge fund, Alameda Research, and covering personal expenses.
Once Bankman-Fried arrives in the United States, defense lawyer Zachary Margulis-Ohnuma says it is likely that Metropolitan Detention Centre in Brooklyn will be his new home. However, the facility is facing overcrowding, leading to transferring some federal defendants to other prisons.
Margulis-Ohnuma continued to say that, at the first court hearing, the judge would ask FTX’s ex-CEO to enter a plea and later decide on bail. The defense lawyer said the hearing must occur within 48 hours of Bankman-Fried’s arrival in the country. However, he expects it will happen sooner than that.
Ex-Federal Prosecutor Believes US Court Could Deny Bankman-Fried Bail
Michael Weinstein, a former federal prosecutor, and white-collar defense lawyer said prosecutors would probably argue that the former billionaire is a flight risk and should remain in custody due to the significant amount of money involved in the case. He added that if the judge grants his release, it will come with very restrictive conditions.
It is unclear what prompted Bankman-Fried’s decision to contest extradition. One possibility could be the harsh conditions at Fox Hill Prison in the Bahamas, like rodent infestation and overcrowding, as mentioned in US State Department 2021 report.
FTX Ex-CEO Faces Over 100 Years in Jail if Found Guilty of All Charges
A top federal prosecutor, Damian Williams, considers the FTX collapse America’s leading financial scam. Bankman-Fried acknowledges his risk management failures at the exchange but insists he has no criminal liability. Nevertheless, if convicted on all eight charges, he could spend up to 115 years in prison.