Back in the United States, Bankman-Fried, 30, faces multiple criminal and civil charges – he is charged with conspiracy, fraud, money laundering and violating campaign finance laws. His extradition could expedite the resolution of criminal and civil cases the US government is pursuing, legal experts say.
Eric Lewis, a lawyer and extradition expert, said Bankman-Fried’s decision to accept extradition may have been because he didn’t want to spend months in a prison in the Bahamas, where the conditions are notoriously bad. While Bankman-Fried has the legal right to challenge the extradition, prosecutors might view that negatively “when it comes time to consider both bail and a potential sentence.”
Continuing the case on US soil will hopefully help deter others who may be tempted to do what Bankman-Fried is accused of, said University of Richmond law professor Carl Tobias. . It will also show that the US Department of Justice and regulatory agencies tasked with protecting consumers from suspected fraud are doing “everything possible to prevent this type of behavior,” he added.
Tobias pointed out that if the disgraced former CEO continues to agree to the extradition, the Southern District could arrange the arraignment and take steps to move the case faster to trial and final resolution, “that which would benefit the US government in seeking justice, defrauded FTX customers, and the general public,” he added.
Bankman-Fried’s legal team is preparing the necessary legal documents and said Bankman-Fried is expected to return to court this week.
Once returned to the United States, the crypto entrepreneur will face trial in federal court in the Southern District of New York.
Lewis, the extradition expert, said Bankman-Fried would likely face a bail hearing if he returned to the United States. Getting out on bail could be difficult, he said, given that Bankman-Fried is a high-profile defendant, facing a hefty prison sentence and could have access to significant funds.
Bankman-Fried, dressed in a navy suit and white button-up shirt, sat on a wooden bench during Monday morning’s hearing where he was to tell Bahamian authorities he ultimately did not want not fight extradition.
But the session only lasted about 10 minutes, after Jerone Roberts, a local defense attorney for Bankman-Fried, said he was on his way to jail to speak with his client about the possibility of extradition, when he learned that he was in court. Roberts lamented that the proceedings were moving “prematurely” and without his taking “any part” in it.
In a heated presentation, Roberts argued that he was not briefed on the proceedings and initially requested a 45-minute break to confer with Bankman-Fried. He then requested a copy of the indictment filed by US prosecutors, so his client would read and know “what he is facing”, as well as additional time to speak with his client and his legal representatives. in the USA.
Prosecutor Franklyn Williams berated Roberts, saying he didn’t want to be part of a play that was unfolding.
The 30-year-old ex-tycoon was arrested last Monday in his luxury apartment in Nassau at the request of the US government. He was then transferred to the only prison in the country, Fox Hill, known for its poor hygienic conditions.
According to a prison official who had direct contact with him, Bankman-Fried has spent his days since watching movies and reading news, mostly about himself.
Meanwhile, the disgraced ex-CEO remained hopeful that his lawyers would be able to secure his release on bail even after it was initially denied last week by a judge on the grounds that Bankman-Fried risked to flee because of his access to “substantial resources”. His lawyers then filed a new bail application with the Supreme Court of the Bahamas, which granted a hearing on January 17. 17.
On Friday, he was considering giving up his fight against extradition so he could be brought to the United States to face charges, The Post reported.
Bankman-Fried was charged in US federal court a day after his arrest for participating in a scheme to defraud FTX clients by channeling their crypto assets to pay debts and expenses incurred by his hedge fund, Alameda Research. He has also been accused of using client funds to invest in other businesses and make political donations. And now, it seems, a lot of the money is missing.
“This is one of the biggest financial frauds in American history,” U.S. Attorney Damian Williams said last week in New York. The alleged fraud destroyed “billions of dollars of customer value overnight,” he added.
Until recently, FTX was one of the largest cryptocurrency exchanges in the world, valued at $32 billion. The company had established a veneer of legitimacy, earning investments from respected venture capitalists, paying to have its logo on Major League Baseball umpires’ uniforms, and spending lavishly on Super Bowl advertising.
Bankman-Fried had also donated tens of millions of dollars to politicians, becoming the second-biggest Democratic donor in the 2022 midterm elections and building a prominent position in Washington.
But now the dramatic downfall of the company and its founder has reinforced the sentiment that the crypto bubble has burst, wiping out billions of dollars in investments made by ordinary people, pension funds, venture capitalists and traditional businesses.
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 complex nature of the circumstances surrounding FTX’s collapse, the cause was “not at all sophisticated,” John J. Ray III, FTX’s new CEO, told lawmakers this week. “It’s just plain old embezzlement,” the business liquidation expert said in testimony before the House Financial Services Committee.
Gerrit De Vynck in San Francisco and Julian Mark in Washington contributed to this report.
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