A court hearing in the Bahamas where Sam Bankman-Fried, the founder of collapsed cryptocurrency exchange FTX, is expected to agree to extradition to the U.S. ended in chaos on Monday, with Mr Bankman-Fried sent back to prison after his past where he was held for a week.
A judge ordered the cryptocurrency entrepreneur to return to the Fox Hill jail in Nassau, the capital of the Bahamas, after one of the prosecutors accused Mr. Bankman-Fried’s local defense attorneys of not preparing to proceed.
After his arrest in the Bahamas last week, Mr Bankman-Fried initially said he would oppose extradition. But he has changed his mind and is preparing to return to the U.S. to face criminal charges, a person familiar with the matter said over the weekend.
A hearing was scheduled for Monday in Nassau District Court. Mr. Bankman-Fried told authorities he would not contest extradition after all. But his local attorney, Jerone Roberts, said he was “appalled” to see his client in court Monday morning and asked to rest for at least 45 minutes to speak to Bankman-Free Mr. De to discuss in private.
Mr Roberts then said Mr Bankman-Fried wanted to read the indictment filed by federal prosecutors before making an extradition decision.
What to Know About the FTX Crash
What is FTX? FTX is a now bankrupt company that was once one of the largest cryptocurrency exchanges in the world. It enables customers to trade digital currencies for other digital or traditional currencies; it also has a native cryptocurrency called FTT. Based in the Bahamas, the company built its business on high-stakes trading options that are not legal in the United States.
The chaos in the courtroom is the latest twist in a criminal case sparked by the sudden collapse of FTX, once one of the world’s largest cryptocurrency exchanges. Bahamas-based FTX filed for bankruptcy on November 11. Within a month, federal prosecutors filed criminal charges against Mr. Bankman-Fried, who also faces civil fraud charges from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.
It is unclear whether Mr Bankman-Fried will appear in court again this week to resolve the extradition issue. Mark Cohen, his New York-based attorney hired to handle the federal prosecution, did not appear in court in the Bahamas.
Mr. Cohen did not respond to a request for comment.
Mr. Bankman-Fried, 30, has been held in the Bahamas since his Dec. 12 arrest at his luxury apartment complex. Last week, federal prosecutors announced that a grand jury indicted him on eight counts of wire fraud, securities fraud, money laundering and campaign finance violations.
He is accused of using billions of dollars in customer deposits to fund cryptocurrency trading firms he controls, buy vast amounts of real estate, invest in other companies and donate money to politicians. Federal prosecutors and U.S. regulators believe he orchestrated a years-long scheme to defraud customers, investors and lenders.
During a bail hearing in the Bahamas last week, Mr Bankman-Fried said he would not waive his right to challenge extradition. After he was refused bail, he was transferred from police custody to the Caribbean island nation’s notorious Fox Hill Prison, which has been widely criticized for its harsh living conditions.
He is expected to change his position on the extradition issue when he appears in Nassau District Court on Monday morning. But the lawsuit is in disarray.
“Whatever leads him to be here this morning has nothing to do with me,” Mr Roberts told the judge before the packed courtroom. The hearing was adjourned so that Mr. Roberts could speak privately with Mr. Bankman-Fried.
Consequences of FTX’s downfall
The sudden collapse of cryptocurrency exchanges has shocked the industry.
When the hearing resumed, the chaos continued. Mr Roberts said Mr Bankman-Fried wanted to make a decision on the extradition but needed “more information”. He also said Mr Bankman-Fried needed time to speak with his attorney in the US.
A court official said Mr Bankman-Fried would be taken back to prison. “I certainly felt it was a wasted day,” Magistrate Shaka Serville said.
Outside the Bahamian courthouse, several people, including those who said they had invested in cryptocurrencies and done business with FTX, showed up to express their outrage to Mr. Bankman-Fried.
Erin Gambrel, who flew from Dallas to Nassau for the hearing, was one of them. She said she shared office space with FTX in the Bahamas earlier this year, where she met Mr. Bankman-Fried.
Ms Gambrel said she would like to see him go “for a long time”. She didn’t invest in FTX, but she said some of her friends did.
“He ruined millions of lives,” she said. “He cost my friends their life savings.”
In the United States, numerous lawsuits seeking class action status have been filed against Mr. Bankman-Fried.