The FTX founder whose alleged fraud has sent the entire crypto industry reeling may be finally coming home to the U.S. Over the weekend, Reuters first reported the 30-year-old FTX founder was going to return to court in the Bahamas Monday and relinquish his bid to fight extradition to the U.S., an unnamed source familiar with the matter told the outlet.
That reporting was further confirmed by CNBC and The Washington Post, who all cited unnamed sources who said Bankman-Fried was giving up the flight fight after he’s been denied bail in the Bahamas. His next bail hearing was set for Jan. 17, according to the Post.
Though he’s been languishing in the Bahamian facility called “Fox Hill,” which — according to U.S. State Department reports from 2020 — is notorious for its poor conditions and overcrowding. So far he’s been living in his own room in the max security wing, according to unnamed sources cited by Bloomberg.
After Bankman-Fried finally legally waives his right to fight extradition, it’s unclear how quickly he would be brought to the U.S., but federal prosecutors likely want to get started on the trial process judging by how fast the U.S. Attorneys Office were able to generate wire fraud, money laundering, and campaign finance violation charges against the once-lauded crypto founder. Bankman-Fried, who often goes by SBF, is also facing further lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.
SBF has been languishing in Bahamian jail for the past week after being held pending U.S. extradition. The Post noted that he’s been spending his time watching movies and reading articles about himself all while hoping he’d be granted bail. He was supposed to testify before congress last week about the collapse of FTX, but the federal charges and subsequent arrest meant he was unable to appear. FTX’s current CEO John Ray III, who’s handling his firm’s bankruptcy, took to the hearing mic to answer questions and proceeded to talk smack about SBF and his crew of “grossly inexperienced and unsophisticated individuals.”
Bankman-Fried has been cited in the fast-moving fraud charges for lying to investors and customers by taking users’ crypto deposited in his exchange and funelling it over to his separate hedge fund Alameda Research. SBF allegedly facilitated those transactions, and even ordered that the company write code to get around FTX’s own interest requirements and allow it to keep a negative balance sheet, even though no other entity was allowed that leeway on his exchange.
As far as the campaign finance violations are concerned, the U.S. Attorney’s Office said the FTX founder had disguised political contributions as coming from other people, though these would exceed the federal limit for campaign donations. U.S. Attorney Damian Williams said during a press conference last week that FTX was “one of the biggest financial frauds in American history.”
Overall, other than the monetary penalties, SBF faces up to 115 years in prison, based on the max penalties for all counts sitting against him. Though of course in these financial fraud cases defendants rarely, if ever, suffer the higher end of penalties. Elizabeth Holmes and Ramesh “Sunny” Balwani, the two at the head of the Theranos fraud case, were just recently sentenced to 11.25 years and 13 years, respectively. Analysts noted that those two received the higher end of sentences for financial fraud, though their original charges were much more severe.
Reuters reported Monday that SBF would likely be brought over to the Metropolitan Detention Centre in Brooklyn once he’s finally in the states, though that’s if he’s not brought elsewhere to keep the once-multi-billionaire away from the riff raff and routine overcrowding of New York’s jail system. Bankman-Fried needs to have a bail hearing within 24 hours of returning to the U.S.
Reuters noted that attorneys will likely argue for no bail and declare SBF a flight risk, but knowing other major financial fraudsters like Holmes were able to walk on bail, there’s a good chance SBF will get the same.