Disgraced cryptocurrency magnate Sam Bankman-Fried has agreed to be extradited to the United States, one of his lawyers said Monday, following a chaotic morning of legal maneuvering in which Mr. Bankman-Fried was torn between court and prison in the Bahamas.
Mr Bankman-Fried is facing charges in the United States of fraud related to the collapse of his cryptocurrency exchange, FTX, which was based in the Bahamas. Jerone Roberts, a local lawyer for Mr Bankman-Fried, told reporters his client had voluntarily agreed to be extradited, defying “the strongest possible legal advice”.
“We as counsel will prepare the necessary documents to trigger the court,” Mr Roberts said. “Mr. Bankman-Fried wants to straighten out the customers and that was the driving force behind his decision.”
After being arrested at his luxury apartment complex last week, Mr. Bankman-Fried initially to challenge the extradition. But he later changed his mind, said a person briefed on the matter over the weekend, and was willing to return to the United States to face criminal charges.
On Monday, Mr. Bankman-Fried at a hearing of the Magistrate Court in Nassau, the capital of the Bahamas. The hearing was specially scheduled for Mr Bankman-Fried to let authorities know he would not challenge the extradition. But the courtroom soon descended into chaos: Mr. Roberts said he was “appalled” to see his client in court, and requested at least a 45-minute break to confer privately with Mr. Bankman Fried.
Mr Roberts said Mr Bankman-Fried needed more information and wanted to read the indictment from federal prosecutors before deciding whether to agree to the extradition.
The magistrate overseeing the case ordered Mr. Bankman-Fried to return to Fox Hill Prison in Nassau, where he has been held since last week.
“I definitely feel like it’s a wasted day,” Judge Shaka Serville said.
Not long after the hearing concluded, Mr. Roberts announced that Mr. Bankman-Fried agreed to the extradition after all.
Mark Cohen, a New York lawyer hired to handle the federal prosecution of Mr. Bankman-Fried, was not in court in Nassau on Monday and did not answer requests for comment. Mark Botnick, a spokesman for Mr Bankman-Fried and Mr Cohen, declined to comment.
It was not clear whether Mr. Roberts that Mr. Bankman-Fried ignored legal advice related only to his own counsel or also to the advice of Mr. Cohen.
What you need to know about the collapse of FTX
What is FTX? FTX is a now-bankrupt company that used to be one of the world’s largest cryptocurrency exchanges. It enabled customers to trade digital currencies for other digital currencies or traditional money; it also had a native cryptocurrency known as FTT. Based in the Bahamas, the company built its business on risky trading options that are not legal in the United States.
The confusion in and out of court was highly unusual for such a high-profile case. FTX was one of the world’s largest and most popular crypto exchanges until it filed for bankruptcy on November 11. Last week, US prosecutors in Manhattan filed criminal charges against Mr. Bankman-Fried, charging him with bank fraud, securities fraud, money laundering and a campaign finance violation.
Mr Bankman-Fried, 30, has been in custody in the Bahamas since December 12, when he was arrested at his home. He is accused of using billions of dollars in client deposits to fund a cryptocurrency trading firm he managed, make lavish real estate purchases, invest in other companies and donate funds to politicians. Federal prosecutors and US regulators allege he orchestrated a years-long scheme to defraud customers, investors and lenders.
Speaking to reporters after the Nassau hearing, Mr Roberts said his legal team was preparing documents so that “a time and date can be set for the extradition process to proceed and complete”. Mr Bankman-Fried could appear for another hearing as early as Tuesday, a person familiar with the matter said.
Once he returns to the United States, Mr. Bankman-Fried are being charged in Federal District Court in Manhattan. He is likely being held at the Metropolitan Detention Center in Brooklyn awaiting a bail hearing.
The extradition will lead to months of maneuvering in the courtroom in the United States. And it will be the end of a curious legal drama that has unfolded in the Bahamas in the week following Mr. Bankman-Fried’s arrest.
At an initial hearing last week, Mr. Bankman-Fried that he would not waive his right to challenge the extradition. Failing bail, he was subsequently moved from a police cell to the Caribbean island’s infamous Fox Hill Prison, which has been widely criticized for its poor living conditions — so much so that locals refer to it as “Fox Hell.”
Mr Bankman-Fried was expected to review his stance on extradition when he reappeared before the Magistrate Court on Monday morning. In a navy suit and white shirt unbuttoned at the cuffs, he slumped in his chair, head bowed, legs trembling.
The aftermath of FTX’s demise
The sudden collapse of the crypto exchange has stunned the industry.
Soon the proceedings fell into turmoil.
“Whatever lead brought him here this morning, I was not involved,” Mr Roberts told the judge in front of a packed courtroom. He said that the appearance of Mr. Bankman-Fried in court “prematurely” and without his intervention. The hearing was adjourned to allow Mr. Roberts to speak privately with Mr. Bankman-Fried.
When the hearing resumed, the confusion only increased. Mr Roberts said Mr Bankman-Fried wanted to make a decision on extradition but needed “a little more information”. He also said Mr Bankman-Fried needed time to speak to his lawyers in the United States.
A prosecutor representing the Bahamas government, Franklin Williams, accused Mr Roberts of wasting the court’s time. Amid the uncertainty, the judge ordered Mr. Bankman-Fried back to prison, where he is being held in a medical ward along with four other inmates.
But by noon, Mr. Roberts had changed course. He gathered some reporters for a meeting in Arawak Cay, an area of Nassau known for its restaurants, and chose a spot by the ocean with palm trees and cruise ships in the background.
Mr Roberts promised “a rather laconic press conference” and said Mr Bankman-Fried had agreed to a voluntary extradition. He said the next step would be for the founder of FTX to appear before the Magistrate Court again.
“During my involvement with Sam, he has expressed an overwhelming desire to set the clients right and make the clients whole,” said Mr. Roberts.
The collapse of FTX has devastated the crypto industry, endangered other businesses and cost customers a fortune in lost cryptocurrencies. A group of visitors to the Bahamas, including some who said they had invested in digital assets and done business with FTX, appeared outside the courthouse to express their anger at Mr Bankman-Fried.
Erin Gambrel, who flew to Nassau from Dallas to attend the hearing, said she shared office space with FTX in the Bahamas this year, where she met Mr. Bankman-Fried.
Ms Gambrel said she wanted to see him ‘go away for a long time’. She had not invested with FTX, she said, but some of her friends had saved money on the platform.
“He destroyed millions of lives,” she said. “He caused friends of mine to lose their savings.”
