Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, has agreed to be extradited to the United States to face criminal charges related to the collapse of the exchange, according to his lawyer. The decision comes just a week after Bankman-Fried’s lawyers initially said they planned to fight extradition. U.S. prosecutors allege that Bankman-Fried played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission (SEC) also accused Bankman-Fried of illegally using investors’ money to buy real estate on behalf of himself and his family. If convicted, the 30-year-old could potentially spend the rest of his life in jail.
FTX Founder Arrest
Bankman-Fried was arrested in the Bahamas last week at the request of the U.S. government. He arrived at the courthouse for his hearing on Monday in a Corrections van, which was escorted by a SWAT vehicle and a police vehicle. A handful of people who identified themselves as either cryptocurrency enthusiasts or FTX customers came to the courthouse to witness the proceedings. Ben Armstrong, the founder of the BitBoy Crypto website, said that he had come to the courthouse with a dozen people, some of whom had lost money with FTX.
If extradited to New York, Bankman-Fried will likely be held in a federal detention center in Brooklyn, where famous prisoners in recent years have included R. Kelly, Martin Shkrelli, and Ghislaine Maxwell. Lawyers for Maxwell, who was convicted of helping millionaire Jeffrey Epstein sexually abuse children, have repeatedly complained to a judge about the unsanitary and inhumane conditions at the detention center. Bankman-Fried’s attorney may request that he be released on bail once he is back in the U.S., although a separate judge in the Bahamas denied his request for bail last week on the grounds that he was a flight risk.
Before the bankruptcy of FTX, Bankman-Fried was considered by many in Washington and on Wall Street as a wunderkind of digital currencies, someone who could help take them mainstream by working with policymakers to bring more oversight and trust to the industry. Bankman-Fried was worth tens of billions of dollars, at least on paper, and was able to attract celebrities like Tom Brady and former politicians like Tony Blair and Bill Clinton to his conferences and events. However, his fall from grace was swift, and he has now become a pariah in the industry.