Sam Bankman-Fried agreed to be extradited from the Bahamas to the U.S. to face criminal charges alleging that he oversaw a multibillion-dollar fraud scheme through his crypto exchange FTX, his spokesperson said.
Bankman-Fried, who was taken into custody by Bahamian officials at the request of federal prosecutors early last week, had initially signaled that he would fight being transferred back to the U.S. He reportedly began to reverse course over the weekend.
A judge in the Bahamas on Wednesday signed off on the extradition.
Federal prosecutors unsealed an eight-count indictment last week accusing Bankman-Fried of fraud, money laundering and campaign finance violations. The Securities and Exchange Commission and Commodity Futures Trading Commission have filed civil charges against the former billionaire, alleging that he routinely used customer funds that were transferred to his hedge fund, Alameda Research, for venture capital investments and crypto trades.
“He used that money for his personal benefit including to make personal investments and cover debts of his personal hedge fund,” Damian Williams, the U.S. attorney for the Southern District of New York, said at a press conference last week.
Bankman-Fried’s arrest — which was preceded by a month-long media tour in which the MIT-educated whiz kid sought to explain how his $32 billion investment empire evaporated almost overnight — set a fire among political groups who accepted tens of millions of dollars in political contributions from FTX executives.
Federal prosecutors now allege that the giving was financed with stolen funds and have urged political leaders and campaign committees to cooperate in clawing back the cash.
FTX’s new CEO John Ray III — a restructuring expert who previously steered Enron through its bankruptcy process — has hammered Bankman-Fried’s shoddy record-keeping and nonexistent corporate controls that allowed company leaders to funnel crypto and other assets across different businesses without any meaningful checks.
The dearth of adequate financial information has made it very difficult to recover company assets. FTX launched a process for the voluntary return of payments and political contributions made by Bankman-Fried and others earlier this week.