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FTX founder and former CEO Sam Bankman-Fried will no longer contest extradition to the U.S., an about-face just days after he was remanded to Bahamian jail pending a hearing, a person familiar with the matter told CNBC.
The former crypto billionaire will appear in Bahamian court this Monday to formally waive his extradition rights, paving the way for federal authorities to secure his return to the U.S.
Extradition between the Bahamas and the U.S. is codified by a 1991 treaty. In practice, the process takes months, if not years, to complete because the accused have numerous chances to appeal. Bankman-Fried’s legal team had initially said that it planned to fight extradition. The change of heart would move up the timeline for Bankman-Fried’s federal trial significantly.
The 30-year-old MIT graduate was originally scheduled for his next hearing in February 2023.
A representative for Bankman-Fried declined to comment.
Bankman-Fried was indicted in New York federal court on Monday, on charges of wire fraud, securities fraud, conspiracy to defraud the United States, and money laundering. If sentenced, he could face the rest of his life in prison. The former FTX CEO also faces concurrent charges from the Securities and Exchange Commission and the Commodity Futures Trading Commission over similar allegations that he worked to defraud FTX customers of billions of dollars since 2019, the year the exchange was founded.
At the heart of Bankman-Fried’s empire was Alameda Research, a crypto hedge fund that federal regulators allege used FTX customer money to engage in trading which lost billions of dollars.
FTX’s collapse was precipitated when reporting by CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried’s hedge fund Alameda Research used as collateral for billions in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, spurring a massive withdrawal in funds. The company froze assets and declared bankruptcy days later. Charges from the SEC and CFTC indicated that FTX had commingled customer funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and that billions in customer deposits had been lost along the way.