Techspace - Sam
Bankman-Fried, Founder of the indicted FTX, has renewed his attack on a
bankrupt cryptocurrency law firm as he steps up his defense against fraud,
money laundering, and campaign finance charges.
On
Monday night, May 8 Bankman-Fried asked
a judge to name the current FTX leadership and attorneys at law firm Sullivan
& Cromwell as part of the "prosecution team" in the criminal case
against him.
Bankman-Fried's
lawyers said FTX bankrupt was far from the only cryptocurrency company to
collapse during a broad market crash in 2022, and that prosecutors hastily
charged their client in a "rush to judgment." "Rather than wait
for traditional civil and regulatory processes following their ordinary course
to address the situation, the Government jumped in with both feet, improperly
seeking to turn these civil and regulatory issues into federal crimes,"
his wrote.
This
suggests that Bankman will target Sullivan & Cromwell and current FTX CEO
John Ray in his criminal defense as well.
Sullivan
& Cromwell, a prominent law firm on Wall Street, represented FTX on
transactional and regulatory matters before its collapse last year. The company
won court approval in January to notify FTX of bankruptcy, overcoming
objections from some FTX creditors and US lawmakers that previous work created
a conflict of interest.
FTX
and Sullivan & Cromwell provided the government with such extensive
cooperation that prosecutors have "effectively represented the company to
assist the prosecution," argued Bankman-Fried.
The
Bankman is fighting accusations that he stole billions of dollars in customer
funds to cover losses in his Alameda Research hedge fund.
Bankman-Fried
publicly attacked Sullivan & Cromwell after the exchange's collapse,
claiming the company bankrupted FTX and belittled his previous work for the
exchange. The company has disputed the claims.
Spokesmen
for Sullivan & Cromwell and FTX did not immediately respond to requests for
comment. A spokesman for the US Attorney's office in Manhattan also declined to
comment.
FTX
and the Sullivan & Cromwell team accused Bankman-Fried of presiding over
the company's staggering internal control deficiencies and said their
cooperation with the government was critical to securing speedy charges against
Bankman-Fried and guilty pleas from other FTX executives.
If
the judge grants Bankman-Fried's request to name them as part of the
prosecution, they will be required to submit documents relevant to the case,
including evidence that could potentially strengthen Bankman-Fried's defense.
Usually, only prosecutors carry out this obligation.
Last
year Bankman was filed for criminal prosecution regarding the collapse of the
FTX cryptocurrency following a broken court appearance in the Bahamas.
Bahamian
authorities arrested Bankman-Fried last Monday at the request of the US
government. US prosecutors accuse him of playing a central role in FTX's rapid
collapse and hiding the problems from the public and investors. The Securities
and Exchange Commission said Bankman-Fried illegally used investors' money to
buy real estate on behalf of himself and his family.
Bankman-Fried's
downfall, however, occurred with astonishing speed. FTX filed for bankruptcy
protection on November, 11 2022 when it ran out of money after the
cryptocurrency equivalent of a bank run.
Before
to bankruptcy, Bankman was considered a digital currency prodigy by many in
Washington and on Wall Street, someone who could help make it mainstream, in
part by working with policymakers to bring more oversight and trust to the
industry.
Bankman-Fried
is worth tens of billions of dollars at least on paper and has been able to
attract celebrities like Tom Brady or former politicians like Tony Blair and
Bill Clinton to his conferences in a luxury resort in the Bahamas. One of
Silicon Valley's leading companies, Sequoia Capital, invests hundreds of
millions of dollars in FTX.
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