Former crypto CEO’s decision could expedite the criminal and civil cases against him

Back in the United States, Bankman-Fried, 30, is facing multiple criminal and civil charges — he’s accused of conspiracy, fraud, money laundering and violating campaign finance laws. His extradition could expedite resolution of the criminal and civil cases that the U.S. government is pursuing, according to legal experts.

Eric Lewis, a lawyer and expert on extraditions, said that Bankman-Fried’s decision to go along with extradition might have been due to his not wanting to spend months in a Bahamian jail, where 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 look at both bail and a potential sentence.”

Prosecuting the case on U.S. soil will hopefully help deter others who may be tempted to do what Bankman-Fried is accused of, said Carl Tobias, a law professor at the University of Richmond. It will also show that the U.S. Justice Department and regulatory agencies that are charged with protecting consumers from purported fraud are doing “all possible to prevent that type of behavior,” he added.

Tobias said that if the disgraced former CEO continued to agree on extradition, a federal court in the Southern District of New York can set the arraignment and take steps to move the case more swiftly to trial and ultimate resolution, “which would be beneficial to the U.S. government in seeking justice, to defrauded FTX customers and to the broader public,” he added.

Bankman-Fried’s legal team is preparing the necessary legal documents and said that Bankman-Fried is expected to return to court this week.

Once he is returned to the United States, the crypto entrepreneur will be arraigned in the New York federal court.

Lewis, the extradition expert, said Bankman-Fried will likely face a bail hearing if he returns to the United States. Getting out on bail might be difficult, he said, given that Bankman-Fried is a high-profile defendant, facing a weighty prison sentence and might have access to significant funds.

Bankman-Fried, dressed in a navy-blue suit and a white button-down shirt, sat on a wooden bench during the Monday morning court session where he was expected to tell Bahamian authorities he did not want to fight extradition after all.

But the session lasted only about 10 minutes, after Jerone Roberts, a local defense lawyer for Bankman-Fried, said he was on his way to prison to speak with his client about the possibility of extradition, when he learned he was already in court. Roberts decried that the proceedings were moving “prematurely” and without him taking “any part in it.”

In a heated presentation, Roberts argued 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, for his client to read and know “what he is facing,” 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.”

The 30-year-old ex-mogul was arrested last Monday in his luxury apartment in Nassau at the request of the U.S. government. 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, Bankman-Fried has spent his days since watching movies and reading news, mostly about himself.

During this time, he held out the hope that his lawyers would be able to secure him bail 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 United States to face charges, The Washington Post reported.

Bankman-Fried was indicted in U.S. federal court a day after his arrest for engaging in a 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 chief executive, 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 in San Francisco and Julian Mark in Washington contributed to this report.