FTX ex-CEO Bankman-Fried’s harsh Bahamas jail could change his plan to fight extradition

New York - The grim conditions FTX founder Sam Bankman-Fried is encountering in the Bahamas prison where he is currently held could change his attitude towards extradition to face fraud charges in the United States.

At Bankman-Fried’s first court appearance on Tuesday, his lawyer said he planned to fight extradition. But that was before the judge

denied Bankman-Fried’s request to be released on US$250,000 (S$337,500) cash bail and a proposal to wear an ankle monitor

to track his movements, and ordered him to be taken into custody at the Bahamas Department of Correctional Services facility, commonly known as Fox Hill.

Despite its bucolic name, Fox Hill is known for overcrowding, poor nutrition, inadequate sanitation and substandard medical care, according to a 2020 US State Department report.

The report described rat and maggot infestation and tiny cells with only buckets for toilets.

People familiar with the matter said Bankman-Fried, 30, currently has his own room in the medical block of Fox Hill’s maximum security unit, where he will remain until his Feb 8 extradition hearing.

One person said Bankman-Fried’s relatives called the prison on Tuesday night to ask whether vegan meals could be delivered to him. He cannot receive visitors due to Covid-19 curbs at the prison.

It is a far cry from the luxury penthouse in Nassau’s exclusive Albany community from which Bankman-Fried ran FTX and, according to federal prosecutors in New York,

orchestrated a years-long fraud

that diverted billions of customer funds from the cryptocurrency exchange to personal use and risky bets by FTX’s sister trading firm, Alameda Research.

Lawyers familiar with the extradition process said Bankman-Fried’s failure to win release on bail could change his calculations about returning to the US, especially since extradition battles can drag on for months or even years.

“It would be tough for SBF to withstand that for any period of time,” said Mr Bruce Zagaris, a Washington-based lawyer.

“He won’t get any special treatment from the inmates and the guards, like he did at the Albany condominium. Eventually, he’s going to say, ‘I don’t want to spend another few years at this place, what are my alternatives?’”

Houston lawyer Douglas McNabb said losing a bail hearing often “causes defendants to rethink whether they want to appeal the case or not because they don’t want to be sitting in a Bahamian jail”. “That’s a decision he’s going to have to make.”

Czech-born businessman Viktor Kozeny, who successfully fought extradition from the Bahamas on US bribery charges, was imprisoned for more than a year at Fox Hill before a judge granted him bail.

The Bahamian prison “has its legacy and reputation of breaking even the toughest of men”, his lawyer said at the time. BLOOMBERG