NASSAU, BAHAMAS — Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, was yesterday remanded to the Bahamas Department of Correctional Services as he fights extradition to the United States.
Citing his access to “substantial finances”, Chief Magistrate Joyann Ferguson-Pratt said she did not believe there was any bail condition she could impose that would satisfy “he would not and could not abscond”.
Ferguson-Pratt said she “entertained” the ex-parte application for a provisional warrant due to the coordinated efforts of local and US law enforcement US which alleged Bankman-Fried misappropriated large sums of money in assets, and a subsequent indictment representing “high-powered financial charges” of wire fraud and money laundering.
Bankman-Fried’s extradition proceedings have been adjourned until February 8, 2023.
He appeared before Chief Magistrate Joyann Ferguson-Pratt shortly after 10.30am for the start of extradition proceedings after a provisional warrant was issued for his arrest yesterday.
However, the matter was adjourned for half an hour because counsel for Bankman-Fried said that they had not spoken with him or received instructions since his arrest yesterday.
Ferguson-Pratt cleared the courtroom to allow Bankmam-Fried to meet with his counsel privately as there were no separate meeting rooms.
When they came back in, proceedings were again paused for several minutes to allow Bankman-Fried to take his medication.
He told Ferguson-Pratt he’d had it with him since his arrest but was not allowed to use it. Bankman-Fried was granted by the judge to briefly leave the courtroom because he said it required him to take his shirt off.
Lead prosecutor Franklyn Williams was joined by attorney Cordell Frazier. Bankman-Fried was represented by Jerone Roberts with Krystal Rolle, KC, and Kendrea Demeritte watching brief as counsel for him in related matters.
Roberts argued that Bankman-Fried had no prior convictions and no other matters pending in any jurisdiction. He noted Bankman-Fried has had access to his passport for three weeks with no restrictions on his movement, and as such, could have fled the country but did not.
Roberts said Bankman-Fried has been working daily with provisional liquidators, and also trying to raise funds for customers to recoup losses. He furthered Bankman-Fried’s desire to remain in the country against the advice of his American counsel.
For his part, Williams said Bankman-Fried’s actions to evade physical appearances in the United States evidenced that he has no intention of facing charges in the US.
Williams underscored all local investments could likely be subject to forfeiture, or liquidation proceedings, adding that SBF’s diminishing interests in The Bahamas made it more likely he would abscond.
He furthered SBF allegedly has deep connections and access to wealth and countries that would not likely engage in extradition proceedings.
Referencing an affidavit used to obtain a provisional warrant, Williams said SBF moved more than $300M to a crypto investment firm Modulo Capital in September 2022 ahead of the solvency crisis.
Police arrested the former FTX CEO sometime around 6pm over the alleged breach of various financial offenses both in the United States and The Bahamas.
In a statement yesterday, Attorney General Ryan Pinder confirmed the arrest followed the receipt of a formal request from the United States that it had filed criminal charges against Bankman-Fried and would likely request his extradition.
FTX owes its top 50 creditors nearly $3.1bn, according to court filings.
FTX was founded in 2019 and grew to become the world’s second-largest crypto exchange until operations crashed in early November when users withdrew some $6bn from the platform in three days. The company filed for bankruptcy protection on November 11 after a rescue deal from leading crypto exchange Binance fell through, and Bankman-Fried resigned as CEO.
However, FTX Digital Markets was placed into provisional liquidation by the Supreme Court of The Bahamas on November 10. The Supreme Court appointed Brian Simms KC, of Lennox Paton, Kevin Cambridge, of PwC Bahamas, and Peter Greaves, of PwC Hong Kong, as the Joint Provisional Liquidators.
The Securities Commission froze the assets of FTX Digital Markets and related parties, in the wake of the company’s collapse.
The 30-year-old founder has previously denied any illegal activity and has said that he didn’t knowingly commit fraud.
Bankman-Fried was expected to testify before the US Congress yesterday.
In a statement on Monday, Congresswoman Maxine Waters said she was surprised by the arrest and disappointed he would not be appearing before the congressional committee, but added that it was “about time the process to bring Bankman-Fried to justice has begun”.
“Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that have harmed over one million people, and wiped out the hard-earned life savings of so many,” Waters said.
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