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Sam Bankman-Fried Said to Conform to Be Extradited to the US

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The disgraced cryptocurrency mogul Sam Bankman-Fried has agreed to be extradited to the US, one in every of his lawyers said on Monday, after a chaotic morning of legal maneuvering through which Mr. Bankman-Fried was shunted backwards and forwards between court and prison within the Bahamas.

Mr. Bankman-Fried is facing fraud charges in the US related to the collapse of his cryptocurrency exchange, FTX, which was based within the Bahamas. Jerone Roberts, a neighborhood defense lawyer for Mr. Bankman-Fried, told reporters that his client had agreed to extradition voluntarily, defying “the strongest possible legal advice.”

“We as counsel will prepare the essential documents to trigger the court,” Mr. Roberts said. “Mr. Bankman-Fried wishes to place the purchasers right, and that’s what has driven his decision.”

After being arrested at his luxury apartment complex last week, Mr. Bankman-Fried initially indicated that he would challenge the extradition. But he later had a change of heart, an individual briefed on the matter said over the weekend, and was prepared to return to the US to be arraigned on a criminal indictment.

On Monday, Mr. Bankman-Fried appeared at a Magistrate Court hearing in Nassau, the capital of the Bahamas. The hearing had been scheduled specifically for Mr. Bankman-Fried to inform the authorities that he wouldn’t contest the extradition. However the courtroom soon descended into chaos: Mr. Roberts said he was “shocked” to see his client in court, and requested no less than one 45-minute break to confer privately with Mr. Bankman-Fried.

Mr. Roberts said Mr. Bankman-Fried needed more information and desired to read the indictment filed by federal prosecutors before deciding whether to associate with the extradition.

The magistrate judge overseeing the matter ordered Mr. Bankman-Fried to return to the Fox Hill prison in Nassau, where he has been held since last week.

“I actually feel it’s a wasted day,” said the judge, Shaka Serville.

Not long after the hearing ended, Mr. Roberts announced that Mr. Bankman-Fried was agreeing to the extradition in spite of everything.

Mark Cohen, a lawyer in Latest York who was hired to handle Mr. Bankman-Fried’s federal prosecution, was not within the courtroom in Nassau on Monday and didn’t return requests for comment. Mark Botnick, a spokesman for Mr. Bankman-Fried and Mr. Cohen, declined to comment.

It was not clear whether Mr. Roberts’s claim that Mr. Bankman-Fried was defying legal advice referred simply to his own counsel or to advice from Mr. Cohen as well.

What to Know About the Collapse of FTX

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What’s FTX? FTX is a now bankrupt company that was one in every of the world’s largest cryptocurrency exchanges. It enabled customers to trade digital currencies for other digital currencies or traditional money; it also had a native cryptocurrency referred to as FTT. The corporate, based within the Bahamas, built its business on dangerous trading options that aren’t legal in the US.

Who’s Sam Bankman-Fried? He’s the 30-year-old founding father of FTX and the previous chief executive of FTX. Once a golden boy of the crypto industry, he was a significant donor to the Democratic Party and known for his commitment to effective altruism, a charitable movement that urges adherents to provide away their wealth in efficient and logical ways.

How did FTX’s troubles begin? Last yr, Changpeng Zhao, the chief executive of Binance, the world’s largest crypto exchange, sold the stake he held in FTX back to Mr. Bankman-Fried, receiving a lot of FTT tokens in exchange. In November, Mr. Zhao said he would sell the tokens and expressed concerns about FTX’s financial stability. The move, which drove down the worth of FTT, spooked investors.

What led to FTX’s collapse? Mr. Zhao’s announcement drove down the worth and spooked investors. Traders rushed to withdraw from FTX, causing the corporate to have a $8 billion shortfall. Binance, FTX’s primary rival, offered a loan to avoid wasting the corporate but later pulled out, forcing FTX to file for bankruptcy on Nov. 11.

Why was Mr. Bankman-Fried arrested? FTX’s collapse kicked off investigations by the Justice Department and the Securities and Exchange Commission focused on whether FTX improperly used customer funds to prop up Alameda Research, a crypto trading platform that Mr. Bankman-Fried had helped start. On Dec. 12, Mr. Bankman-Fried was arrested within the Bahamas for lying to investors and committing fraud. The day after, the S.E.C. also filed civil fraud charges.

The confusion in and outdoors the courtroom was highly unusual for such a distinguished case. FTX was one in every of the world’s largest and hottest crypto exchanges until it filed for bankruptcy on Nov. 11. Last week, U.S. prosecutors in Manhattan filed criminal charges against Mr. Bankman-Fried, accusing him of wire fraud, securities fraud, money laundering and a campaign finance violation.

Mr. Bankman-Fried, 30, has been held in custody within the Bahamas since Dec. 12, when he was arrested at his home. He has been accused of using billions of dollars in customer deposits to finance a cryptocurrency trading firm he controlled, make lavish real estate purchases, spend money on other corporations and donate funds to politicians. Federal prosecutors and U.S. regulators contend he orchestrated a yearslong scheme to defraud customers, investors and lenders.

Chatting with reporters after the hearing in Nassau, Mr. Roberts said his legal team was preparing documents so a “time and date might be fixed for the extradition process to proceed and to be accomplished.” Mr. Bankman-Fried could appear for a latest hearing as soon as Tuesday, an individual conversant in the matter said.

Once he’s returned to the US, Mr. Bankman-Fried might be arraigned in Federal District Court in Manhattan. He’s prone to be detained on the Metropolitan Detention Center in Brooklyn, pending a bail hearing.

The extradition will arrange months of courtroom maneuvering in the US. And it is going to be the top of a peculiar legal drama that has unfolded within the Bahamas within the week since Mr. Bankman-Fried’s arrest.

At an initial hearing last week, Mr. Bankman-Fried said he wouldn’t waive his right to contest the extradition. He was denied bail, after which moved from a police holding cell to the Caribbean island nation’s notorious Fox Hill prison, which has been widely criticized for its poor living conditions — a lot in order that locals call it “Fox Hell.”

Mr. Bankman-Fried was expected to reverse his position on extradition when he appeared in Magistrate Court again on Monday morning. Wearing a navy blue suit and a white shirt unbuttoned on the cuff, he slumped in his seat, along with his head down and his leg shaking.

The sudden collapse of the crypto exchange has left the industry stunned.

Soon the proceedings were thrown into turmoil.

“Whatever trail got him here this morning, it didn’t involve me,” Mr. Roberts told the judge in front of a packed courtroom. He said Mr. Bankman-Fried’s court appearance had happened “prematurely” and without his involvement. The hearing was adjourned so Mr. Roberts could speak privately with Mr. Bankman-Fried.

When the hearing resumed, the confusion only intensified. Mr. Roberts said Mr. Bankman-Fried desired to make a call on extradition but needed “a bit more information.” He also said Mr. Bankman-Fried needed time to talk along with his lawyers in the US.

A prosecutor representing the Bahamian government, Franklyn Williams, accused Mr. Roberts of wasting the court’s time. Amid the uncertainty, the judge ordered Mr. Bankman-Fried to be returned to prison, where he’s being held in a medical unit with 4 other inmates.

By the afternoon, nonetheless, Mr. Roberts had modified tack. He convened a number of reporters for a gathering at Arawak Cay, an area of Nassau known for its restaurants, picking an oceanside spot with palm trees and cruise ships within the background.

Promising “a relatively laconic press conference,” Mr. Roberts said Mr. Bankman-Fried had agreed to a voluntary extradition. He said the following step could be for the FTX founder to seem once more in Magistrate Court.

“Throughout my involvement with Sam, he has indicated an amazing desire to place the purchasers right and make the purchasers whole,” Mr. Roberts said.

The collapse of FTX has devastated the crypto industry, putting other corporations in jeopardy and costing customers a fortune in lost cryptocurrencies. Outside the courthouse, a gaggle of tourists to the Bahamas, including some who said they’d invested in digital assets and done business with FTX, showed up to precise anger with Mr. Bankman-Fried.

Erin Gambrel, who flew to Nassau from Dallas to attend the hearing, said she had shared office space with FTX this yr within the Bahamas, where she met Mr. Bankman-Fried.

Ms. Gambrel said she desired to see him “go away for a very long time.” She had not invested with FTX, she said, but a few of her friends had stored funds on the platform.

“He’s ruined tens of millions of lives,” she said. “He’s caused friends of mine to lose their life savings.”

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