The disgraced cryptocurrency mogul Sam Bankman-Fried has agreed to be extradited to the United States, one of his lawyers said on Monday, after a chaotic morning of legal maneuvering in which Mr. Bankman-Fried was shunted back and forth between court and prison in the Bahamas.
Mr. Bankman-Fried is facing fraud charges in the United States related to the collapse of his cryptocurrency exchange, FTX, which was based in the Bahamas. Jerone Roberts, a local 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 necessary documents to trigger the court,” Mr. Roberts said. “Mr. Bankman-Fried wishes to put the customers right, and that is 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, a person briefed on the matter said over the weekend, and was prepared to return to the United States 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 tell the authorities that he would not contest the extradition. But the courtroom soon descended into chaos: Mr. Roberts said he was “shocked” to see his client in court, and requested at least one 45-minute break to confer privately with Mr. Bankman-Fried.
Mr. Roberts said Mr. Bankman-Fried needed more information and wanted to read the indictment filed by federal prosecutors before deciding whether to go along 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 certainly feel it is 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 after all.
Mark Cohen, a lawyer in New York who was hired to handle Mr. Bankman-Fried’s federal prosecution, was not in the courtroom in Nassau on Monday and did not 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 just to his own counsel or to advice from Mr. Cohen as well.
What to Know About the Collapse of FTX
What is FTX? FTX is a now bankrupt company that was one 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 known as FTT. The company, based in the Bahamas, built its business on risky trading options that are not legal in the United States.
The confusion in and outside the courtroom was highly unusual for such a prominent case. FTX was one of the world’s largest and most popular 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 in 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, invest in other companies and donate funds to politicians. Federal prosecutors and U.S. regulators contend he orchestrated a yearslong scheme to defraud customers, investors and lenders.
Speaking to reporters after the hearing in Nassau, Mr. Roberts said his legal team was preparing documents so a “time and date could be fixed for the extradition process to continue and to be completed.” Mr. Bankman-Fried could appear for a new hearing as soon as Tuesday, a person familiar with the matter said.
Once he is returned to the United States, Mr. Bankman-Fried will be arraigned in Federal District Court in Manhattan. He is likely to be detained at the Metropolitan Detention Center in Brooklyn, pending a bail hearing.
The extradition will set up months of courtroom maneuvering in the United States. And it will be the end of a peculiar legal drama that has unfolded in the Bahamas in the week since Mr. Bankman-Fried’s arrest.
At an initial hearing last week, Mr. Bankman-Fried said he would not waive his right to contest the extradition. He was denied bail, and then 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 — so much so 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 at the cuff, he slumped in his seat, with his head down and his leg shaking.
The Aftermath of FTX’s Downfall
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 did not 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 wanted to make a decision on extradition but needed “a bit more information.” He also said Mr. Bankman-Fried needed time to speak with his lawyers in the United States.
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 is being held in a medical unit with four other inmates.
By the afternoon, however, Mr. Roberts had changed tack. He convened a few reporters for a meeting at Arawak Cay, an area of Nassau known for its restaurants, picking an oceanside spot with palm trees and cruise ships in the background.
Promising “a rather laconic press conference,” Mr. Roberts said Mr. Bankman-Fried had agreed to a voluntary extradition. He said the next step would be for the FTX founder to appear once again in Magistrate Court.
“Throughout my involvement with Sam, he has indicated an overwhelming desire to put the customers right and make the customers whole,” Mr. Roberts said.
The collapse of FTX has devastated the crypto industry, putting other companies in jeopardy and costing customers a fortune in lost cryptocurrencies. Outside the courthouse, a group of visitors to the Bahamas, including some who said they had invested in digital assets and done business with FTX, showed up to express 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 year in the Bahamas, where she met Mr. Bankman-Fried.
Ms. Gambrel said she wanted to see him “go away for a long time.” She had not invested with FTX, she said, but some of her friends had stored funds on the platform.
“He’s ruined millions of lives,” she said. “He’s caused friends of mine to lose their life savings.”
