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The founder of the defunct crypto exchange FTX, Sam Bankman-Fried (SBF), made an appearance in court on February 21. The court hearing took place in order to address a potential conflict of interest that could arise following SBF’s decision to change his lawyers ahead of his March 28 sentencing.
Sam Bankman-Fried Chooses To Stick With New Lawyers
According to a report by Dailymail, Sam Bankman-Fried told Judge Lewis Kaplan that he would stick with his new lawyers despite the conflict of interest on the part of his new lawyers. Marc Mukasey and Torrey Young had both entered an appearance on January 9 to represent SBF, signalling the substitution of the FTX founder’s defense team led by Mark Cohen.
Bankman-Fried’s decision to appoint Mukasey and Young as his lawyers led the Prosecution to request a Curcio hearing so that the defendant may “knowingly waive any conflict that could arise.” In line with this, Judge Kaplan, during the hearing, asked the FTX founder if he was comfortable with his new counsels representing him despite the conflict of interest.
In response, SBF confirmed that he was aware of the possible conflict of interest and stated that he was comfortable with the lawyers representing him. Judge Kaplan went as far as asking the defendant to describe the conflict in his own words just to ensure that he understood the issue at hand well, which Bankman-Fried is reported to have described succinctly.
The steps taken by the Judge were necessary as every defendant has the right to a conflict-free legal representation. Moreover, this could potentially become an issue if SBF’s case goes on appeal, as he could argue that he wasn’t well represented (during his sentencing) due to the conflict of interest.
Interestingly, SBF all but confirmed that he was going to appeal his conviction. During the hearing, he mentioned that he had consulted with Alexandra Shapiro, the lawyer who will handle his appeal.
What The Possible Conflict Of Interest Is About
Mukasey and Young also happen to be the defense attorneys of Alex Mashinsky, the former CEO of bankrupt crypto lender Celsius. As noted by the Prosecution, there is a possible conflict of interest due to the intricate relationship between Bankman-Fried’s Alameda Research and Mashinsky’s Celsius.
Celsius happened to have lent money to Alameda Research, while the trading firm used FTX’s customer funds to repay some of these loans. Mashinsky also seems to have blamed Alameda Research (and SBF, by extension) for contributing to Celsius’ collapse. As such, there is the possibility that the lawyers may be compromised while representing either party.
However, the Prosecution noted that this possible conflict of interest is not so “severe” and can be waived. Mashinsky, who is currently out on bail, is also expected to have his Curcio hearing, where he must also “knowingly and intelligently” waive his right to a conflict-free representation.
FTT Token sitting at $1.77 | Source: FTTUSDT on Tradingview.com
Featured image from Entrepreneur, chart from Tradingview.com
