FTX Founder Sam Bankman-Fried Agrees to Extradition to the US to Face Multiple Fraud Charges
The collapse of the FTX crypto exchange took the globe by storm. Considered one of the most prominent entities in the world of crypto, FTX had over one million users at the height of its success.
At one time, the exchange had the third highest crypto trading volumes. However, everything came tumbling down when news of a serious liquidity crunch at FTX emerged. It was alleged that Sam-Bankman Fried – founder of FTX, had illegally used customers cash to speculate.
The ensuing market commotion – including the dumping of a plan to acquire FTX by Binance – is what finally culminated in the resignation of FTX founder Sam Bankman-Fried, his subsequent arrest, and now his extradition to the US.
Fugitive in Luxury
Sam Bankman-Fried was arrested on 12 th December at a $40 million ultra-luxe Bahamas penthouse. Bankman was arrested by the Royal Bahamas Police Force after the Southern District of New York filed a sealed indictment of the former FTX CEO for fraudulent dealings involving his two companies FTX and Alameda.
This was to be quickly followed up by Sam Bankman-Fried’s extradition to the US to face criminal charges for defrauding investors of their money. At the time, Sam Bankman-Fried had decided to fight his extradition.
On the other hand, Bahama’s administration expressed its commitment to keep FTX founder in custody until he was formally extradited.
Bahama’s commitment to cooperate with US against FTX CEO
For instance, Phillip Davis who is Bahama’s Prime Minister issued a statement saying that “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.”
Prime Minister Davis assured the public that while “the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.”
After he was arrested, Bankman-Fried appeared before Bahamas Chief Magistrate JoyAnn Ferguson-Pratt. SBF’s request to be released on bail was denied by the judge as FTX’s former CEO was considered a “flight risk” due to his financial capability. Instead, Sam Bankman-Fried, former crypto billionaire, was held at Bahamas Fox Hill Prison.
Extradition – Back to a Villain’s Welcome?
Stepping back from his initial decision, the FTX CEO agreed to be extradited on Tuesday, December 20th. The fallen crypto honcho cited “a desire to make the relevant customers whole” as the main reason behind his decision to accept extradition.
The only condition the FTX founder gave for accepting extradition was to be allowed to go through his indictment which was issued by the Southern District of New York.
By virtue of SBF voluntarily agreeing to be extradited to the US, the FTX founder’s will be taken over by the US. He is being charged on eight criminal counts which include fraud, conspiracy to commit fraud, and conspiracy to launder money.
Tragedy or redemption for Crypto’s Golden Child
According to some legal schools of thought, Bankman-Fried’s voluntary acceptance of extradition may not do much in terms of getting him a favorable legal outcome. That is because contrary to SBF’s claims of being unaware of the FTX implosion, the whole fiasco looks like fraud plain and simple.
The sudden change in fortunes of the X-Crypto King who was a central figurehead in crypto finance is without a doubt dire. As it stands, Bankman-Fried could face a maximum of 115 years prison time if he is found liable for all the 8 counts against him. It remains to be seen how the fairy tale of crypto’s shiniest golden child will end – in redemption or in insurmountable tragedy.