Sam Bankman-Fried, FTX’s founder, is set to be extradited from the Bahamas to the United States. The news surfaced following a reversal in the decision of Bankman-Fried after four days in Bahamian prison.
A source familiar with the case told CNBC that FTX’s former CEO surrendered the extradition request despite his initial objection.
Rumor has it that Sam Bankman-Fried struggled to live in the local prison. He’s currently in the Fox Hill prison which is well-known for its harsh conditions.
From Beach to Busted
On Dec. 12, the Bahamas’ police, upon the request of the US authorities, arrested Sam Bankman-Fried. The US sought to bring him to justice in an extradition agreement with the Bahamas.
Bankman-Fried applied for bail before the Bahamas Supreme Court after the arrest, saying he had no intention to flee the Bahamas. But the request was rejected by Chief Justice JoyAnn Ferguson-Pratt. The bail refusal sent him back to prison.
It is unclear what prompted the former cryptocurrency billionaire to alter his mind, but as a result of this decision, he will be able to show up in US courts to face eight criminal allegations, some of which include securities fraud, money laundering, and violations of financial regulation.
If he is convicted of a crime, the founder of FTX could spend the rest of his life behind bars. The extradition procedure that will take place between the two nations will take several months to many years.
Defense attorney Zachary Margulis-Ohnuma claims that upon arrival in the United States, he will very certainly be sent to the Metropolitan Detention Center in the borough of Brooklyn.
Sam Bankman-Fried will be required to present a defense, and a decision about bail will be made by a judge. This hearing needs to take place within 48 hours after he lands in the United States.
The fallen billionaire Sam Bankman-Fried previously expressed guilty for poor management but claimed that he was not legally responsible for the collapse of this empire.
Questions About The Missing Funds
As much as people want legal punishment for Bankman-Fried, they also seek justice for those who have suffered as a result of the FTX’s demise. Part of this includes the traceability of the missing funds of FTX customers.
Sam Bankman-Fried acquired a fortune of more than $20 billion by building FTX into one of the world’s largest exchanges before it abruptly imploded this year.
The FTX bankruptcy, according to Damian Williams, the senior federal prosecutor in Manhattan, was one of the largest financial scams in American history.
The funds involved in the FTX disaster are apparently substantial, and locating those funds remains a major mystery. Peter Smith, the creator, and CEO of Blockchain.com, recently gave his thoughts on these concerns in an interview with Fox Business.
According to Smith, part of the missing funds is traceable using on-chain data as long as they’re in the crypto ecosystem.
But, “the most challenging thing for [blockchain analytics] firms working on this today is when money moves off chain and into the banking system because they’re no longer able to track it,” Smith added.
Mary Cilia, FTX’s new chief financial officer, claimed that the exchange currently has over $1 billion in assets, including $720 million in cash disbursed to various institutions.
Cilia also claimed that FTX still has approximately $130 million in cash in Japan, where FTX’s subsidiary, FTX Japan, has announced that it will reimburse all investors. An additional $423 million is in custody at an unregistered broker, but Cilia has refused to reveal its identity.
After declaring bankruptcy, FTX was hacked, resulting in a loss of more than $500 million. To mitigate the impact of unlawful transactions, the exchange had to shift all crypto assets into cold wallets.
Many users questioned whether the exchange’s cash flow was conducted by a member of Sam Bankman-internal Fried’s team.