Sam Bankman-Fried Stands by Legal Team Amidst Conflict of Interest Concerns

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Tim Hakki

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Tim Hakki

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February 22, 2024

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Disgraced former FTX CEO Sam Bankman-Fried (SBF) on Wednesday confirmed plans to stick with his new lawyers Marc Mukasey and Torrey Young, who are also representing Celsius CEO Alex Mashinsky, according to a report by Reuters.

In a hearing, U.S. Southern District Judge Lewis Kaplan asked Bankman-Fried about the potential conflict of interest. The former billionaire told Kaplan he’d consulted his current lawyers Mark Cohen and Christian Everdell, about the new appointments, alongside Alexandra Shapiro, the lawyer handling his appeal.

Cohen and Everdell will soon ask Kaplan for permission to withdraw from the case, according to Reuters, which cites Mukasey as a source.

The main potential conflict of interest for Mukasey and Young’s clients lies in the fact that Celsius owes Alameda Research $12.8 million, according to the bankrupt lender’s Chapter 11 bankruptcy filing.

Alameda Research was the sister trading company/market maker of SBF’s FTX. Unlike in traditional finance, where different parties execute different functions in a trade, there was no separation between FTX and Alameda Research.

When Alameda lost money on some bad trades, SBF/FTX sent many millions in customer funds to Alameda in what’s now been recognized as crypto’s biggest-ever fraud.

First photo of Sam Bankman-Fried in jail at MDC Brooklyn. (December 17, 2023) pic.twitter.com/QlENjjmeQG

— Tiffany Fong (@TiffanyFong_) February 20, 2024

When Terra’s UST stablecoin collapsed in 2022 and spread contagion that was publicly bankrupting crypto lenders and trading firms across the space, SBF appeared like a white knight with his ostensibly endless wallet, bailouts left and right. One such beleaguered firm was Celsius, although the FTX bailout never came to fruition.

SBF told Judge Kaplan on Wednesday that said he knows Mukasey and Young represent Mashinsky “at a high level” and that “some of the conduct of each of the firms is coming up in both cases.”

Bankman-Fried’s Legal Quagmire

Aged 30 at the time, SBF was one of the youngest multibillionaires on the planet when his house of cards collapsed back in November 2022.

He had carefully cultivated an image of himself a Toyota-driving everyman, a League of Legends-loving CEO, and an “effective altruist”—someone dedicated to raising billions of dollars to give it away to charitable causes.

The facade shattered when former FTX executives testified that SBF was misappropriating customer money and presenting the public with an image that was totally at odds with his company’s precarious financials.

On Monday, crypto influencer Tiffany Fong released a prison picture of SBF, looking worlds apart from the SBF that was profiled in TIME’s list of the 100 most influential people in the world.

FTX investors have also collectively filed a class action lawsuit against law firm Sullivan and Cromwell, claiming the firm abetted FTX in the sixteen months before its collapse. The law firm had billed the exchange $8.5 billion for serving “as primary legal counsel” over the aforementioned period.

Bankman-Fried’s sentencing is on March 28, 224.