Sam Bankman-Fried Will Not Fight Extradition Effort By U.S., Reports Say

Topline

FTX founder Sam Bankman-Fried is set to withdraw his legal challenge against an effort by U.S. officials to extradite him from the Bahamas, according to multiple reports, a move that will open the door for him to face trial in a U.S. Federal Court where he faces multiple criminal charges including wire fraud, violation of campaign finance laws and securities fraud.

Key Facts

According to Reuters, Bankman-Fried is set to appear before a court in the Bahamas and is expected to waive his right to challenge extradition to the U.S.—a U-turn from his stance last week.

After being denied bail last week, Bankman-Fried was moved to the island’s infamous Fox Hill where he is being kept in the sick bay and undergoing medical evaluation, according to the Washington Post.

The reports adds that he is likely being kept in the sick bay longer than usual because of his “notoriety” and fears that he may be threatened or harmed by other inmates.

The reason behind the ex-billionaire’s U-turn on the issue remains unclear but a 2021 U.S. State Department report about the Fox Hill prison paints a grim picture of its conditions pointing out overcrowding, lack of access to medical cares, inmates being forced to use buckets as toilets and infestation by rats, maggots and insects.

Once extradited to the U.S. Bankman-Fried will face trial at the Southern District of New York Federal Court, where prosecutors are likely to portray the FTX founder as a flight risk to quash any bail attempts.

Key Background

On Tuesday, U.S. prosecutors unsealed a 13-page criminal indictment against Bankman-Fried that charged him with eight criminal counts. The charges against the former-billionaire include conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate U.S. campaign finance laws. In addition to this the Securities and Exchange Commission filed an civil suit alleging that Bankman-Fried was “engaged in a scheme to defraud” FTX’s investors and customers while diverting billions to shore up his personal wealth. Bankman-Fried was arrested in the Bahamas on Monday evening after criminal charges were filed against him in the U.S.

Tangent

According to the New York Times, federal prosecutors have sought details from both Democratic and Republican lawmakers about political donations they have received from Bankman-Fried. Lawmakers from both parties who received donation from Bankman-Fried or other FTX executives have tried to distance themselves from the scandal. According to the report the prosecutors have sought records about the donations to examine if Bankman-Fried and his FTX colleagues lied in response to disclaimers placed on various political donation websites. Donors have to agree that they are only giving their own money to the campaigns as being reimbursed by a third party like a company or another person for political donations is illegal.

Further Reading

Sam Bankman-Fried to reverse decision on contesting extradition (Reuters)

Sam Bankman-Fried Charged With Eight Criminal Counts—Including Wire Fraud And Campaign Finance Violations (Forbes)

Sam Bankman-Fried Is Denied Bail And Jailed Until February (Forbes)