Disgraced crypto boss Sam Bankman-Fried is reversing his decision to challenge his extradition to the US, paving the way for his arrest and trial in an American court.
The crypto mogul, who was under arrest in the Bahamas after being accused of a massive financial fraud, is expected to appear in a local court on Monday to reverse his decision to contest his extradition to the US, according to the Reuters news agency.
He was remanded on Tuesday to the Bahamas’ Fox Hill prison. It was not immediately clear what prompted him to change his mind and decide not to contest extradition, the news agency reported.
Mr Bankman-Fried potentially faces a prison sentence of over 100 years in the US, after his $20bn firm tanked following charges of financial fraud.
One US prosecutor this week called it “one of the biggest financial frauds in American history”.
Upon arrival in the US, Mr Bankman-Fried would likely be held at the Metropolitan Detention Center in Brooklyn, defence lawyer Zachary Margulis-Ohnuma told Reuters.
He is likely to file a plea for bail, according to the attorney. But prosecutors can try to prevent that by arguing that the billionaire founder, who was living in a sprawling mansion in the Bahamas off late, is a flight risk.
The bankruptcy of the crypto giant FTX and the arrest of its founder has sent shockwaves in the crypto world. The company quickly grew to be the third-largest crypto exchange by volume.
But the empire created by the 30-year-old founder started to fall when his company was accused of using customers’ deposits on trading operations at his hedge fund, Alameda Research, in violation of US securities law.
Vast sums of money customers invested in FTX remain “missing” and were allegedly used to fund bets at his hedge funds. Experts say the missing money is going to be the key in the case to prosecute the crypto founder.
“The missing money gives prosecutors strong arguments that he is a flight risk,” former federal prosecutor and white-collar defence attorney Michael Weinstein was quoted by Reuters as saying.
“I expect that if a judge grants pretrial release, they would impose very restrictive and onerous conditions.”
The collapse of FTX and the scandals the young founder is accused of is being seen as a major hit to the cryptocurrency market, sparking more scepticism at a time when the industry is already hit by volatility and turmoil.
