Sam Bankman-Fried will now surrender himself for extradition before Bahamian court Monday, says source

FTX collapse shakes crypto to its core.  The pain may not be over yet

FTX founder Sam Bankman-Fried (2nd L) is taken away in handcuffs by officers from the Royal Bahamas Police Force in Nassau, Bahamas, December 13, 2022.

Mario Duncanson | AFP | Getty Images

FTX founder and former CEO Sam Bankman-Fried will no longer contest his extradition to the US, a reversal just days after he was taken to a Bahamian prison pending a hearing, a person familiar with the matter told CNBC.

The former crypto billionaire is due to appear in a Bahamian court this Monday to formally relinquish his extradition rights, paving the way for federal authorities to secure his return to the United States

Extradition between the Bahamas and the US is codified in a 1991 treaty. In practice, the trial takes months, if not years, as the accused have numerous appeals. Bankman-Fried’s lawyers had initially stated that they wanted to take action against the extradition. The change of heart would significantly increase the timeline for the federal trial of Bankman-Fried.

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 charged Monday in New York federal court with wire fraud, securities fraud, conspiracy to defraud the United States and money laundering. If convicted, he faces the rest of his life in prison. The former FTX CEO is also facing similar allegations by the Securities and Exchange Commission and the Commodity Futures Trading Commission that he has worked to defraud FTX clients out 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 claim used FTX client funds to engage in trades that lost billions of dollars.

The collapse of FTX was accelerated when CoinDesk’s coverage revealed a highly concentrated position in self-issued FTT coins used by Bankman-Fried hedge fund Alameda Research as collateral for billions of dollars in crypto loans. Binance, a competing exchange, announced it was selling its stake in FTT, resulting in a massive cash withdrawal. The company froze assets and filed for bankruptcy days later. SEC and CFTC indictments indicated that FTX had mixed customer funds with Bankman-Fried’s crypto hedge fund Alameda Research, losing billions in customer deposits in the process.

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