NASSAU, Bahamas — Sam Bankman-Fried has agreed voluntarily to his extradition to the United States, where he has been charged with defrauding customers of his cryptocurrency exchange company, FTX, a person familiar with the matter confirmed Monday.
But the session was abruptly adjourned, some 10 minutes after it began, after Jerone Roberts, a lawyer for Bankman-Fried said that he was “shocked” to find that his client was in court. Roberts said he was on his way to prison to speak with him when he learned he was in court, and decried that the proceedings were moving “prematurely” and without him taking “any part in it.”
In a heated presentation, Roberts continued to argue he had not been informed of the proceedings and initially asked for a 45-minute break to confer with Bankman-Fried. He then requested a copy of the indictment filed by U.S. prosecutors, as well as additional time to speak with his client and his legal representatives in the United States.
Prosecutor Franklyn Williams chastised Roberts, saying he did not wish to be part “of a play that was unfolding.”
Magistrate Shaka Serville allowed Bankman-Fried time to speak under supervision with his lawyers via telephone and carried on to remand Bankman-Fried back to Fox Hill prison, where he has been held for almost a week in the medical department.
Wearing a navy-blue suit with a white button-down shirt, Bankman-Fried sat on a wooden chair and spoke at the end of the brief court session, agreeing to return to court at a later time once he had spoken to his U.S. counsel.
Bankman-Fried’s legal team is preparing the necessary legal documents and said that Bankman-Fried is expected to return to court this week.
Earlier on Monday, Roberts told reporters that his client had agreed to the extradition defying “the strongest possible legal advice.”
“We as counsel will prepare the necessary documents to trigger the court,” Mr. Roberts said. “Mr. Bankman-Fried wishes to put the customers right, and that is what has driven his decision.”
It is the latest twist in the ongoing story of FTX, which has gripped the cryptocurrency world since the once-respected company collapsed over several days in November when it could no longer meet customer withdrawal demands.
The 30-year-old ex-mogul was arrested last Monday in his luxury apartment in Nassau at the request of the U.S. government on charges ranging from fraud to campaign finance violations. He was then transferred to the nation’s only prison, Fox Hill, which is notorious for its poor and unsanitary conditions.
According to a prison official who has had direct contact with him, he has spent his days since watching movies and reading news, mostly about himself.
During this time, the disgraced ex-CEO held out the hope that his lawyers would be able to secure him bail after even after it was initially denied last week by a judge on grounds that Bankman-Fried was a flight risk due to his access to “substantial resources.” His lawyers then filed a new application for bail before the Bahamas’ Supreme Court, which granted a hearing on Jan. 17.
By Friday, he was contemplating giving up his fight against extradition so that he could be brought to the U.S. to face charges, The Post reported.
Bankman-Fried was indicted in U.S. federal court a day after his arrest for engaging in scheme to defraud FTX customers by funneling their crypto assets to pay for debts and expenses incurred by his hedge fund, Alameda Research. He was also charged with using customer funds to invest in other companies and make political donations. And now, it seems, much 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 in customer value overnight,” he added.
Until recently, FTX was one of the world’s largest cryptocurrency exchanges, valued at $32 billion. The company had established a veneer of legitimacy, winning investments from respected venture capital firms, paying to have its logo on uniforms of Major League Baseball umpires and spending lavishly on Super Bowl advertising.
Bankman-Fried had also donated tens of millions of dollars to politicians, becoming the second-largest Democratic donor in the 2022 midterm elections and building a prominent position for himself in Washington.
But now, the spectacular fall of the company and its founder has deepened a sense that the crypto bubble has burst, wiping out billions of dollars of investments made by ordinary people, pension funds, venture capitalists and traditional companies.
In addition to criminal charges, Bankman-Fried also faces civil suits 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 sophisticated whatsoever,” John J. Ray III, FTX’s new CEO, told lawmakers this week. “This is just plain old embezzlement,” the corporate wind-down expert said in testimony before the House Financial Services Committee.
Gerrit De Vynck and Tory Newmyer contributed to this report.
