End clap for Sam Bankman-Fried? The founder and ex-boss of FTX, a cryptocurrency exchange platform that went bankrupt in November, is more than ever at risk of extradition to the United States. He was arrested on Monday, December 13 in the Bahamas “on request from the American authorities”, Bahamian Attorney General Ryan Pinder announced. The United States, which lodged a complaint against him, “will probably seek his extradition”does he still have let it be known.
After his arrest, Sam Bankman-Fried appeared in a magistrate’s court in Nassau. The Kingdom’s Prime Minister, Philip Davis, had said that the Bahamas and the United States have “both have an interest in holding accountable individuals associated with FTX who may have betrayed the public trust and broken the law”. The Bahamas are thus leading “their own criminal investigation into the collapse of FTX”, he added.
SBF does not waive its extradition hearing
Since the bankruptcy of FTX in early November, its founder has not been discreet. Far from there. In addition to his tweets, he even chained media appearances despite the risk of trial for fraud. On November 30, he spoke alongside several personalities at the DealBook Summit organized by the New York Times.
According to the local newspaper Nassau Guardian, Bankman-Fried was in court in the presence of his family but also of the representatives of the embassy of the United States. The same source claims that the ex-FTX boss “does not waive his right to an extradition hearing”during which a judge must decide whether or not to extradite him to America.
BREAKING | Former FTX CEO Sam Bankman-Fried, who is facing criminal charges in the United States, told Chief Magistrate JoyAnn Ferguson-Pratt today that he is not waiving his right to an extraction hearing.
— Nassau Guardian (@GuardianNassau) December 13, 2022
He was supposed to speak before a parliamentary committee of the House of Representatives, just like John Ray, the new boss of FTX. His arrest in the Bahamas thus compromises his participation.
Solicited by Insider, US legal experts have explained that once criminal charges are formally instituted against SBF, the US will be able to seek his extradition. Can an extradition hearing be a game-changer for Sam Bankman-Fried? The procedure could already take time.
“Prosecutors have several steps to go through before requesting an extradition: bringing charges against a defendant is quite rigorous and may involve a grand jury. The latter must examine the evidence put forward by the prosecutors to determine whether it justifies criminal proceedings”said Jordi de Llano, a former Boston federal prosecutor who investigated financial crimes. Where applicable, “this leads to a formal indictment. Prosecutors can then ask the court to issue an arrest warrant”.
Extradition processes between the Bahamas and the United States are governed by a 1990 treaty, which came into effect in 1994. Charges such as money laundering, offenses considered felonies in both countries, or crimes which may result in a sentence of more than one year in prison, may constitute grounds for extradition.
Sam Bankman-Fried admits ‘big mistakes’
One of the world’s leading cryptocurrency exchanges, FTX, valued at $32 billion at the start of the year, has no longer been able to repay its creditors the money they deposited there. . The group filed for bankruptcy on November 11.
Bankruptcy restructuring expert John Ray III, who took over the reins of FTX, described the company’s situation in a damning court report released Thursday (November 17th). “In my 40-year career, I have never seen such a complete failure of corporate controls and such a complete absence of reliable financial information as has occurred [avec FTX]”.
In his report, the one who managed the liquidation of the energy giant Enron from 2001, revealed astonishing details about the managerial behavior of Sam Bankman-Fried and his close collaborators. Use of chat applications to validate transactions, transfer of large sums to the personal accounts of the founder and his advisers or even the purchase, with company funds, of private goods… The list is long!
Sam Bankman-Fried, who was the second largest donor to the Democratic Party behind billionaire George Soros and an economic partner of the World Economic Forum, did not miss the opportunity presented to him by the NYT during the Dealbok Summit to to explain. During his speech, he said that he “did not intentionally mix” funds from FTX clients with those from Alameda Research, a hedge fund.
He also denied having committed fraud. “I never tried to defraud anyone,” he said, affirming “not realizing how dangerous a position businesses were in until it was too late”.
The founder of FTX also admitted to “big mistakes”including “poor to non-existent risk management with no oversight to protect client accounts.”
Asked about donations to the Democratic Party, which amounted to $40 million, he said he had no intention of “buying off lawmakers”.