Sam Bankman-Fried Is Set for Extradition to U.S.
Send any friend a story
As a subscriber, you have 10 gift articles to give each month. Anyone can read what you share.
Sam Bankman-Fried, the founder of FTX, arriving at the Magistrate Court on Wednesday in Nassau, Bahamas.Credit…Eva Marie Uzcategui for The New York TimesSam Bankman-Fried, the disgraced cryptocurrency executive, is set to be flown back to the United States to face fraud charges in federal court after he told a judge in the Bahamas on Wednesday that he agreed to be extradited.
Mr. Bankman-Fried will soon arrive in New York to face charges of wire fraud, securities fraud, money laundering and a campaign finance violation. His departure from the Bahamas was delayed by several hours as officials completed the final paperwork, but the local government eventually announced that Mr. Bankman-Fried would leave the country on Wednesday night.
Once in New York, he will be arraigned in Federal District Court in Manhattan, though the exact timing of the proceeding remains unclear. The charges stemmed from the collapse of Mr. Bankman-Fried’s crypto exchange, FTX, which was based in the Bahamas until its bankruptcy last month.
Mr. Bankman-Fried, 30, has been in custody in the Bahamas since he was arrested at his luxury apartment complex on Dec. 12. In Magistrate Court on Wednesday, he confirmed that he had signed documents authorizing the extradition. His lawyer, Jerone Roberts, said Mr. Bankman-Fried was “anxious to leave” the Bahamas and hoped to travel as early as Wednesday.
In court, Mr. Bankman-Fried told the magistrate judge, Shaka Serville, that he was “doing well.” Asked whether he was in good health, Mr. Bankman-Fried replied, “Yes.”
What to Know About the Collapse of FTX
Card 1 of 5
What is FTX? FTX is a now bankrupt company that was 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. The company, based in the Bahamas, built its business on risky trading options that are not legal in the United States.
Who is Sam Bankman-Fried? He is the 30-year-old founder of FTX and the former chief executive of FTX. Once a golden boy of the crypto industry, he was a major donor to the Democratic Party and known for his commitment to effective altruism, a charitable movement that urges adherents to give away their wealth in efficient and logical ways.
How did FTX’s troubles begin? Last year, Changpeng Zhao, the chief executive of Binance, the world’s largest crypto exchange, sold the stake he held in FTX back to Mr. Bankman-Fried, receiving a number of FTT tokens in exchange. In November, Mr. Zhao said he would sell the tokens and expressed concerns about FTX’s financial stability. The move, which drove down the price of FTT, spooked investors.
What led to FTX’s collapse? Mr. Zhao’s announcement drove down the price and spooked investors. Traders rushed to withdraw from FTX, causing the company to have a $8 billion shortfall. Binance, FTX’s main rival, offered a loan to save the company but later pulled out, forcing FTX to file for bankruptcy on Nov. 11.
Why was Mr. Bankman-Fried arrested? FTX’s collapse kicked off investigations by the Justice Department and the Securities and Exchange Commission focused on whether FTX improperly used customer funds to prop up Alameda Research, a crypto trading platform that Mr. Bankman-Fried had helped start. On Dec. 12, Mr. Bankman-Fried was arrested in the Bahamas for lying to investors and committing fraud. The day after, the S.E.C. also filed civil fraud charges.
Mr. Bankman-Fried wore a white shirt and a blue suit, with a plastic bag on his lap; he arrived after a breakfast of toast and jam at Fox Hill, the notorious Bahamian jail where he has been held for the last week, according to the facility’s head administrator, Doan Cleare.
Once Mr. Bankman-Fried is extradited, Mark Cohen, a lawyer in New York, is expected to oversee his criminal defense.
Even before the extradition, Mr. Bankman-Fried’s legal team in the United States had been negotiating a possible bail package with federal prosecutors. Under the terms that have been discussed, Mr. Bankman-Fried could be released on bail with highly restrictive conditions, including home detention and electronic monitoring.
Any bail arrangement must be approved by a federal judge.
Mr. Bankman-Fried’s extradition to the United States will be the end of an unusual week of legal maneuvering in the Bahamas.
On Monday, Mr. Bankman-Fried appeared at Magistrate Court, where he was expected to consent to extradition to the United States. But the hearing devolved into chaos as Mr. Roberts cast doubt on whether his client would voluntarily proceed with the transfer.
By the end of Monday, however, Mr. Roberts had reversed himself, announcing at a hastily arranged news conference that Mr. Bankman-Fried had agreed to be extradited after all.
The back and forth over the extradition was a new twist in a legal drama that began in early November, when a run on deposits exposed an $8 billion hole in FTX’s accounts. Federal prosecutors have charged Mr. Bankman-Fried with defrauding customers, investors and lenders by diverting billions in customer funds to a crypto trading firm called Alameda Research, which was closely tied to FTX.
Since FTX’s founding in 2019, prosecutors and U.S. regulators say, Mr. Bankman-Fried has orchestrated a sweeping fraud, using customer money to finance lavish real estate purchases in the Bahamas, investments in other companies, political contributions and a glamorous marketing campaign.
Mr. Bankman-Fried resigned as FTX’s chief executive when the company filed for bankruptcy in November. He was indicted less than a month later by a grand jury in the United States District Court for the Southern District of New York.
Damian Williams, the U.S. attorney for the Southern District of New York, has said the investigation is continuing and that additional charges are possible.
Mr. Williams was expected to hold a news conference on Wednesday afternoon to discuss Mr. Bankman-Fried’s case but it did not take place. The news conference has since been canceled.
William K. Rashbaum and Benjamin Weiser contributed reporting.
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.