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In a recent development, Sam Bankman-Fried, the indicted founder of FTX, has intensified his defense efforts against a range of serious charges, including fraud, money laundering, and campaign finance violations. Bankman-Fried has set his sights on FTX’s law firm, Sullivan & Cromwell, as he seeks to mount a robust defense against these allegations. Late on Monday, he filed a request with a judge to designate FTX’s current leadership and Sullivan & Cromwell as part of the “prosecution team” in his criminal case.
Bankman-Fried’s argument revolves around the claim that FTX and Sullivan & Cromwell have provided extensive cooperation to the government, effectively acting as de facto allies of the prosecution. He alleges that their cooperation was so substantial that the government effectively deputized FTX to aid in his prosecution. Bankman-Fried, formerly the CEO of FTX, is accused of misappropriating billions of dollars in customer funds to cover losses at his hedge fund, Alameda Research.
Sullivan & Cromwell, a renowned Wall Street law firm boasting a team of approximately 900 lawyers, had represented FTX in various transactions and regulatory matters before the exchange’s collapse last year. In January, the firm obtained court approval to advise FTX during its bankruptcy proceedings, overcoming objections from certain FTX creditors and U.S. lawmakers who raised concerns about potential conflicts of interest stemming from their past work for the exchange.
Following FTX’s collapse, Bankman-Fried publicly criticized Sullivan & Cromwell, accusing the firm of hastening FTX’s bankruptcy process and downplaying its prior involvement with the exchange. The law firm has steadfastly denied these allegations.
Bankman-Fried’s recent filing in Manhattan federal court indicates his intention to target both Sullivan & Cromwell and FTX’s current CEO, John Ray, as part of his criminal defense strategy. However, representatives from Sullivan & Cromwell, as well as FTX, have not yet provided comments on this latest development. The U.S. Attorney’s office in Manhattan has declined to comment as well.
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FTX and Sullivan & Cromwell have also levied accusations against Bankman-Fried, claiming he presided over a severe lack of internal corporate controls. They argue that their cooperation with the government was instrumental in securing a swift indictment against Bankman-Fried and guilty pleas from other FTX executives.
If the judge grants Bankman-Fried’s request to designate Sullivan & Cromwell and FTX’s current leadership as part of the prosecution team, they would be obligated to provide any relevant documents, including evidence that could potentially support Bankman-Fried’s defense. This requirement is typically reserved for prosecutors alone.
Bankman-Fried’s defense team asserts that Ray and FTX’s bankruptcy lawyers have acted as public spokespersons for the prosecution, selectively disclosing information that incriminates Bankman-Fried. The evolving dynamics of this legal battle highlight the significance of the role played by Sullivan & Cromwell in relation to the unfolding case against FTX’s founder.
The case continues to draw attention as industry observers closely monitor the legal proceedings and their potential implications for both FTX and the broader cryptocurrency landscape. The judge’s decision on Bankman-Fried’s request and the subsequent developments in this high-profile case will undoubtedly shape the future trajectory of FTX and its founder’s legal fate.
