FTX founder Sam Bankman-Fried is seeking to involve FTX’s current leadership and its legal representatives at Wall Street law firm Sullivan & Cromwell in the criminal case against him, claiming their extensive cooperation with the government. This move could significantly impact his defense strategy and bring new complications to the case.
Bankman-Fried is facing multiple charges, including fraud and money laundering, and has lately intensified his fight against Sullivan & Cromwell. In a recent court filing, he requested that the court consider FTX’s current leadership, including CEO John Ray, and the exchange’s attorneys at the law firm as part of the prosecution team, stating that their cooperation with authorities has been extensive.
Sullivan & Cromwell had a history of representing FTX in transactions and regulatory matters before the exchange’s collapse. The firm had received court approval to advise FTX during its bankruptcy, overcoming objections from certain FTX creditors and U.S. lawmakers who alleged a conflict of interest due to its past work.
Bankman-Fried had previously criticized Sullivan & Cromwell, accusing it of expediting FTX’s bankruptcy and downplaying its earlier work for the exchange. However, the law firm refutes these allegations.
The recent filing in a Manhattan federal court suggests that Bankman-Fried intends to focus on Sullivan & Cromwell and FTX’s current CEO, John Ray, as part of his defense strategy. FTX and the Sullivan & Cromwell team have accused Bankman-Fried of overseeing a severe lack of internal corporate controls, asserting that their collaboration with authorities was essential in securing a swift indictment against him and guilty pleas from other FTX executives.
If the judge approves Bankman-Fried’s request to include them in the prosecution, they must disclose any relevant documents, including evidence that could support Bankman-Fried’s defense. This obligation usually applies only to prosecutors. Bankman-Fried’s defense team contends that Ray and FTX bankruptcy attorneys have acted as “public mouthpieces” for the prosecution, providing selectively incriminating information about Bankman-Fried.
It is not uncommon for those with an interest in a criminal proceeding to seek information to assist a defense. Still, this is usually obtained by working with authorities, as opposed to challenging the representation of a third party such as a law firm. Including Sullivan & Cromwell and FTX’s leadership as part of the prosecution has the potential to bring new complications to the case, including additional time delays and the potential of further claims and counterclaims from all parties.
In response to these recent developments, Sullivan & Cromwell has not provided any comment. However, they have maintained their position throughout the entire process of representing FTX and working with authorities. The firm has expressed confidence that its actions were appropriate and cooperated fully with the Justice Department’s investigation.
This case highlights the complex nature of cryptocurrency business interactions and legal representations, and the extent to which parties involved can impact ongoing litigation. It also raises questions about the role and responsibilities of law firms in cases such as these, as well as their obligations to clients and the public interest.
As the legal proceedings continue, it remains to be seen how the court will rule on Bankman-Fried’s request and the potential impact this could have on his defense strategy. Regardless of the outcome, this case serves as a reminder of the high stakes involved in the cryptocurrency industry and the importance of effective legal representation for individuals and companies under fire.
