An unexpected complication has occurred in the FTX United States extradition situation.
Sam Bankman-Fried (SBF), the one-time millionaire and disgraced FTX founder, appeared before an emergency hearing in the Bahamas Magistrate’s Court on Monday morning (December 19). It was SBF’s first time in court since his earlier request for bail of just $250,000 and a significantly lenient supervised home release was denied.
The hearing, in which SBF’s lawyer, Jerome Roberts, told the court he was not aware of his client’s plans, was adjourned as no verdict had been rendered, meaning the crypto fraudster has not yet been extradited to the US.
SBF’s lawyer asked the judge why there was confusion from the start with why the emergency hearing was being held.
“Things are moving ahead prematurely and without any involvement on my part,” Roberts said.
Roberts did not immediately respond to PYMNTS’ request for comment. His client wants to read his indictment before making a decision on extradition. The SBF has apparently seen the affidavit laying out the allegations against him, as reported by Reuters.
SBF’s original extradition court trial was set for February 8, but is likely to be called earlier given the chaos of Monday’s hearing.
A Change of Heart
PYMNTS reports over the weekend that the self-styled wonder behind the quick-fire FTX crypto exchange, accused of defrauding millions of customers out of several billion dollars, has reversed course and decided to fight his extradition from the Bahamas. U.S
Although widely reported, these plans apparently caught SBF’s own legal team off guard.
SBF was arrested in the Bahamas the night before he was set to testify before lawmakers during a Dec. 13 House Financial Services Committee hearing about his company’s collapse, an action that left committee chairwoman Maxine Waters “surprised” and “disappointed.” According to his public statement.
He faces eight interrelated criminal counts brought against him by the US Department of Justice (DOJ) ranging from wire fraud to various conspiracy counts.
While SBF is currently the only senior FTX executive to be charged criminally, the federal indictment alleges that he conspired with others, both “knowingly and unknowingly.”
They also face additional civil lawsuits filed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) alleging that FTX’s crypto empire was completely fraudulent “from the beginning.”
The former CEO has been locked up in the notorious Bahamian prison, Fox Hill, for the past week at the behest of US prosecutors.
Fox Hill Prison was described by a US State Department report as overcrowded and infested with rats, with inmates provided with buckets for toilets. The SBF is being held in Fox Hill’s medical ward, which is considered a cushier environment than the rest of the prison with real beds and air conditioning.
SBF’s parents reportedly asked the island prison if vegetarian options could be made available to their son while he awaits his fate. As covered by The Washington Post Saturday (Dec. 17), they were, somewhat surprisingly, successful in their request.
Still, a jail cell is a jail cell, and incarceration is a far cry from the billionaire’s former oceanfront penthouse and high-flying, celebrity-studded past life.
In the blink of an eye
The collapse of SBF and its FTX crypto empire has been one of the biggest impacts of not only wealth but credibility in recent times.
His former company rode the crypto wave, becoming, at one point, the third largest cryptocurrency exchange in the world. In the midst of his ascension, SBF was being fancifully portrayed as the next JP Morgan, and his face and unkempt black hairdo were plastered on magazine covers and television sets.
It only took 48 hours for the allegedly highly overleveraged exchange to crash, evaporating millions of customer funds.
The subsequent fallout and media scrutiny of crypto’s post-FTX landscape has made regulation of the volatile industry a top priority for US lawmakers, who previously took a hands-off approach to the emerging industry. Complicating matters is the fact that many of the key players are involved offshore and offshore.
In numerous media appearances since his company’s collapse, the one-time mogul, now better known as Prisoner No. 14372, has repeatedly denied committing fraud — or knowingly breaking the law. He instead blamed internal mismanagement and poor accounting as well as risk management failures.
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