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FTX Fraud Case: SBF Shifts Blame, Points Finger at Former Law Firm

source-logo  dailycoin.com 31 May 2023 09:00, UTC
  • Sam Bankman-Fried’s case continues to raise dust.
  • The former FTX founder has placed his former law firm in the spotlight.
  • The firm served as the primary law firm for the crypto exchange from inception.

The multiple-count fraud case against disgraced FTX founder Sam Bankman-Fried (SBF) continues to spark discussion, though it has yet to get to trial.

On May 8, the former FTX Chief Executive Officer turned heads by moving to dismiss ten of the 13 criminal charges against him, alleging them to be duplicative, vague, and in some instances, in violation of the extradition treaty with the Bahamas.

In the latest effort to wriggle Bankman-Fried out of criminal charges, his attorneys are looking to pin the blame on his former law firm.

Seriously Bad Legal Advice?

In a court filing dated Tuesday, May 30, Bankman-Fried’s attorneys’ asked the court to force prosecutors to hand over documents from former FTX law firm Fenwick & West or grant permission to subpoena them.

The disgraced FTX founder’s lawyers argue that these documents are pertinent to preparing Bankman-Fried’s defense. The lawyers allege that the law firm’s advice guided many actions at the core of the criminal charges against the FTX founder.

According to Bankman-Fried’s lawyers, this advice included using encrypted auto-deleting messaging platforms for communication, questionable loans to executives, and potential infringements of United States banking regulations.

The latest filing has unsurprisingly sparked derision from the crypto community.

Parrot Capital, @ParrotCapital on Twitter argued that it was difficult to believe that Bankman-Fried, the son of two prominent American lawyers, was ignorant of the fact that he was getting “bad legal advice” to run what they described as a fraudulent “money laundering and influence peddling operation.”

So the son of two of the most powerful lawyers in the nation (who hired known scumbag lawyer Dan Friedberg from a previous fraud scandal) didn't know they were getting "bad legal advice" to run their massive fraud, money laundering and influence peddling operation?

Enough BS!🦜 https://t.co/frL56Qoev2

— Parrot Capital 🦜(Read the pinned 🧵) (@ParrotCapital) May 31, 2023

One user questioned whether the law firm also directed the FTX founder to misappropriate customer funds.

This is ridiculous. Will Silicon Valley Law Firm advise you to misappropriate clients' assets? Do you want to pretend to be a baby who knows nothing like O 'Neill and get away with it? FTX 2.0 has nothing to do with you.

— KaiYuan6 (@Yuan6Kai) May 31, 2023

Fenwick & West did not immediately respond to a request for comment. The firm served as the primary law firm for Alameda and FTX.

Former FTX Chief Regulatory Officer Dan Friedberg previously worked as a lawyer at Fenwick & West. The same is true for former FTX General Counsel Can Sun.

On the Flipside

  • Other FTX and Alameda executives like Caroline Ellison and Gary Wang entered guilty pleas to similar fraud charges and are cooperating with prosecutors.

Why This Matters

At its peak, FTX was among the largest crypto exchanges by volume. The exchange’s collapse caused significant pain in the markets, and the actions of its executives, including Bankman-Fried, are at the center of the debacle.

Read this to learn about the response of prosecutors to Sam Bankman-Fried’s motions to dismiss:

Prosecutors Slam SBF’s Motions to Dismiss as “Meritless”

Bitcoin is trading at a discount on Binance Australia. Find out why:

Why Bitcoin Is Trading at a $5k Discount on Binance Australia