FTX’s law firm is back in the cross-hairs as Bankman-Fried kicks off defense

By Andrew Goudsward

(Reuters) – Indicted FTX founder Sam Bankman-Fried has renewed his attacks on the bankrupt cryptocurrency exchange’s law firm as he mounts his defense against a raft of fraud, money laundering and campaign finance charges.

Bankman-Fried late Monday asked a judge to designate FTX’s current leadership and the exchange’s attorneys at law firm Sullivan & Cromwell as part of the “prosecution team” in the criminal case against him.

FTX and Sullivan & Cromwell provided such extensive cooperation to the government that prosecutors had “effectively deputized the company to aid the prosecution,” Bankman-Fried argued. The 31-year-old ex-CEO is fighting charges that he stole billions of dollars in customer funds to plug losses at his Alameda Research hedge fund.

Sullivan & Cromwell, a prominent Wall Street law firm with about 900 lawyers, represented FTX on transactions and regulatory matters before its collapse last year. The firm secured court approval in January to advise FTX in its bankruptcy, overcoming objections from some FTX creditors and U.S. lawmakers that its past work created a conflict of interest.

Bankman-Fried publicly assailed Sullivan & Cromwell following the exchange’s collapse, claiming the firm rushed FTX into bankruptcy and downplayed its prior work for the exchange. The firm has denied the claims.

Monday’s filing in Manhattan federal court indicated that the one-time crypto billionaire would target Sullivan & Cromwell and current FTX CEO John Ray in his criminal defense as well.

Spokespeople for Sullivan & Cromwell and FTX did not immediately respond to requests for comment. A spokesman for the U.S. Attorney’s office in Manhattan declined to comment.

FTX and its Sullivan & Cromwell team have accused Bankman-Fried of presiding over a shocking lack of internal corporate controls and said their cooperation with the government was crucial to securing a quick indictment against Bankman-Fried and guilty pleas from other FTX executives.

If the judge grants Bankman-Fried’s request to designate them as part of the prosecution, they would be required to turn over any documents relevant to the case, including evidence that potentially bolsters Bankman-Fried’s defense. Normally only prosecutors face that obligation.

In Monday’s filing, Bankman-Fried’s defense team said Ray and FTX’s bankruptcy lawyers have acted as “public mouthpieces” for the prosecution and have turned over “cherry-picked” information incriminating Bankman-Fried.