Chief Magistrate Joyann Ferguson-Pratt yesterday denied bail for Sam Bankman-Fried after hearing hours of arguments by lawyers and remanded him to the Bahamas Department of Correctional Services until February 8, 2023.
Bankman-Fried, wearing a suit with no tie, appeared stoic when the magistrate gave the decision.
His parents and other supporters, who cried during some portions of the hearing, were silent as well.
The former CEO of FTX, which was one of the world’s largest cryptocurrency exchanges that relocated its headquarters to The Bahamas last year, appeared in court after he was arrested on Monday night on a provisional warrant. The United States is seeking his extradition.
Bankman-Fried, also known as SBF, told the chief magistrate that he will fight extradition.
In an indictment unsealed yesterday, prosecutors for the Southern District of New York allege that Bankman-Fried conspired with others to commit wire fraud, commodities fraud, securities fraud and money laundering.
The chief magistrate described the charges as “high powered financial charges”.
Shortly after 4:30 p.m. yesterday, Ferguson-Pratt ruled on an a bail application made by Bankman-Fried’s lawyer, Jerone Roberts.
“I am of the view, the considered view, that the risk of flight is so great that Bankman-Fried ought to be remanded into custody,” she said.
She said any conditions that she could set for bail “cannot satisfy the risk of Bankman-Fried’s flight”.
“So in coming to my decision, I am not satisfied that there are any conditions I can place on Bankman-Fried to sufficiently satisfy me because of his access to substantial finances that he would not or could not abscond,” Ferguson-Pratt said.
She then asked Bankman-Fried to stand and said, “Your application is not granted.
“I am remanding you to The Bahamas Department of Correctional Services. I shall adjourn this matter to February 8, 2023.”
He will appear before Magistrate Shaka Serville at that time.
The chief magistrate made a note that once at the prison at Fox Hill, Bankman-Fried should be seen by a doctor.
She allowed him to speak with his lawyers and relatives before he was taken to prison.
Shortly before 6 p.m., after the sun disappeared from the sky, and light, intermittent rain poured down, Bankman-Fried was escorted into a blue Ford SUV and taken to prison.
Just 24 hours before that he was a free man at his Albany penthouse in southwest New Providence.
He was arrested shortly after 6 p.m. on Monday.
Fight for bail
Before her decision was made, lawyers for the United States and Bankman-Fried spent most of yesterday on bail arguments.
Deputy Director of Legal Affairs Franklyn Williams, KC, who appeared on behalf of the United States, argued that the issue of bail does not arise in an extradition matter.
But the chief magistrate ruled that it did and heard an application by Roberts.
Williams argued that Bankman-Fried is a flight risk, that he will abscond and has good reason to do so if he is released.
Williams read from the affidavit of a special agent of the US Federal Bureau of Investigation (FBI) arguing that Bankman-Fried has ties to foreign countries and access to large sums of money that is not traceable by law enforcement. He also said Bankman-Fried has access to private airplanes that could aid in his escape.
But by contrast, Roberts argued that his client was a “fit candidate” for bail.
When FTX collapsed in November, Bankman-Fried did not flee The Bahamas, Roberts said.
Roberts noted that after FTX’s collapse, the Financial Crimes Unit of the Royal Bahamas Police Force was in possession of Bankman-Fried’s passport.
“A few days later his passport was released to me and I gave it to him,” Roberts said.
“That may have been three, three and a half weeks ago. He could have fled.”
Roberts said Bankman-Fried has been assisting the joint provisional liquidators, who are overseeing the winding up of FTX Digital Markets.
“He wanted to stay here and try to fix things for FTX customers,” he said.
He added, “He has demonstrated a desire to be here and not run away. He had the opportunity and the means, he had his passport.”
But Williams noted that Bankman-Fried faces an indictment in the United States.
“The fact that he has chosen to stay here is of no merit,” he said.
“He cannot fight those charges here. That’s what this is about. The fact that he decided to stay here and assist the Securities Commission of The Bahamas does not avail him.”
Roberts also noted that Bankman-Fried is a vegan, suffers from depression, insomnia and also has attention deficit disorder (ADD).
He said his client uses Emsam, a patch that must be replaced daily; takes 10 milligrams of Zyrtec, an allergy pill, every day; and takes 10 milligrams of Adderall every four hours.
Roberts also said the court could impose conditions on Bankman-Fried like an ankle bracelet, reporting to a police station, or “the ultimate imposition” of a cash bail.
“Police already have his passport,” Roberts said, noting that it was taken by police when Bankman-Fried was arrested on Monday.
When asked what amount he had in mind for a cash bail, Roberts said $250,000.
Roberts reiterated that Bankman-Fried is a fit candidate for bail.
“He will appear,” he said.
“He has a team of lawyers and we are prepared to fight.”
Upon learning that Bankman-Fried did not have his medication, Ferguson-Pratt ordered the police to escort one of his relatives to his Albany penthouse to collect it.
Asked why he didn’t alert the arresting officers about the medication on Monday night, Bankman-Fried said, “It was a hectic night. I was under the false impression that I could go back and get more. I was told there was extreme time pressure.”
FTX crumbled like a house of cards last month following a liquidity crunch.
Reports surfaced that brought into question whether FTX improperly used customer funds to prop up Alameda Research, a hedge fund owned by Bankman-Fried.
As the frenzy heightened, there was a run on FTX. The company could not satisfy customer withdrawal requests, which totaled more than $5 billion.
The Securities Commission of The Bahamas froze FTX’s assets in The Bahamas and moved to put the company into liquidation.
FTX’s US entities are engaged in Chapter 11 bankruptcy in the United States.
Described as charming and friendly, Bankman-Fried spent most of November and early December going on what some called an apology tour, claiming he was unaware of how bad things were at his company.