The 30-year-old cryptocurrency mogul was indicted in federal courtroom in Manhattan on Tuesday and accused of partaking in a scheme to defraud FTX clients by utilizing billions of {dollars} in stolen deposits to pay for bills and money owed and to make investments for his crypto hedge fund, Alameda Research LLC.
His resolution to consent to extradition would pave the way in which for him to look in U.S. courtroom to face wire fraud, cash laundering and marketing campaign finance costs.
Upon arrival within the United States, Bankman-Fried would possible be held on the Metropolitan Detention Center in Brooklyn, although some federal defendants are being held at jails simply exterior New York City because of overcrowding on the facility, stated protection lawyer Zachary Margulis-Ohnuma.
At his preliminary courtroom listening to in Manhattan, Bankman-Fried could be requested to enter a plea and a choose would make a willpower on bail, Margulis-Ohnuma stated. The legal professional added that such a listening to should happen inside 48 hours of Bankman-Fried’s arrival within the United States, although it might possible be sooner.
Prosecutors will possible argue that Bankman-Fried is a flight threat and may stay in custody due to the big sums of cash concerned within the case and the unclear location of these funds.
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“The missing money gives prosecutors strong arguments that he is a flight risk,” stated former federal prosecutor and white-collar protection legal professional Michael Weinstein. “I expect that if a judge grants pretrial release, they would impose very restrictive and onerous conditions.”
Any trial is probably going greater than a 12 months away, authorized specialists advised Reuters.
A spokesman for Bankman-Fried declined to remark. Bankman-Fried has acknowledged threat administration failings at FTX however has stated he doesn’t consider he has felony legal responsibility.
A spokesman for the U.S. Attorney’s Office in Manhattan declined to remark.
‘BIGGEST FINANCIAL FRAUDS IN AMERICAN HISTORY’
It was not instantly clear what prompted Bankman-Fried to alter his thoughts and resolve to not contest extradition.
He was remanded on Tuesday to the Bahamas’ Fox Hill jail after Chief Magistrate JoyAnn Ferguson-Pratt rejected his request to stay at residence whereas awaiting a listening to on his extradition.
The U.S. State Department in a 2021 report stated circumstances at Fox Hill had been “harsh,” citing overcrowding, rodent infestation and prisoners counting on buckets as bathrooms. Authorities there say circumstances have since improved.
Bankman-Fried amassed a fortune valued at over $20 billion as he rode a cryptocurrency increase to construct FTX into one of many world’s largest exchanges. His arrest final Monday within the Bahamas, the place he lives and the place FTX is predicated, got here only a month after the change collapsed amid a flurry of buyer withdrawals.
Damian Williams, the highest federal prosecutor in Manhattan, described the collapse of FTX as one of many “biggest financial frauds in American history.” He has described the workplace’s investigation as ongoing, and urged individuals with data of wrongdoing at FTX or Alameda to cooperate.
One prime government at FTX, Ryan Salame, advised securities regulators within the Bahamas on Nov. 9 that belongings belonging to the change’s clients had been transferred to Alameda to cowl the hedge fund’s losses, in line with a doc made public as a part of FTX’s chapter proceedings in Delaware.
FTX filed for chapter on Nov. 11, the identical day Bankman-Fried stepped down as CEO.
A lawyer for Salame didn’t instantly reply to a request for remark.