Former FTX CEO Sam Bankman-Fried to reverse decision on contesting US extradition

Former FTX CEO Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said on Saturday.

The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers.

His decision to consent to extradition would pave the way for him to appear in US court to face charges of using billions of dollars in stolen customer deposits to pay for expenses and debts and to make investments on behalf of his cryptocurrency hedge fund, Alameda Research LLC.

Upon arrival in the United States, Bankman-Fried would probably be held at the Metropolitan Detention Centre in Brooklyn, though some federal defendants are being held at prisons just outside New York City due to overcrowding at the facility, said defence lawyer Zachary Margulis-Ohnuma.

At his initial court hearing in Manhattan, Bankman-Fried would be asked to enter a plea and a judge would make a determination on bail, Margulis-Ohnuma said. The lawyer added that such a hearing must take place within 48 hours of Bankman-Fried’s arrival in the United States, though it would probably be sooner.

Prosecutors will probably argue that Bankman-Fried is a flight risk and should remain in custody because of the large sums of money involved in the case and the unclear location of those funds.

“The missing money gives prosecutors strong arguments that he is a flight risk,” said former federal prosecutor and white-collar defence lawyer Michael Weinstein. “I expect that if a judge grants pretrial release, they would impose very restrictive and onerous conditions.”

Any trial is probably more than a year away, legal experts told Reuters.