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An investigation into the law firm Sullivan & Cromwell LLP, which worked with the now-defunct crypto exchange FTX, revealed that the firm was neither involved in the fraud nor aware of the financial troubles that plagued the collapsed trading platform.
Sullivan & Cromwell Cleared of Negligence in FTX Collapse
Following a recent investigation, former U.S. prosecutor Robert Cleary disclosed that Sullivan & Cromwell LLP was neither implicated in the fraud at FTX nor aware of any misconduct. According to a report from Reuters, Cleary found no proof that the law firm overlooked “red flags” while working with the FTX bankruptcy and during the ultimately unsuccessful Voyager Digital acquisition.
The probe explained that while the law firm conveyed false statements to third parties, Sullivan & Cromwell was unaware that the statements were inaccurate, Cleary mentioned. One cited instance was during the Voyager, when Sullivan & Cromwell partner Andy Dietderich believed FTX’s finances were “rock solid” on the same day Sam Bankman-Fried was seeking a buyer or investor for FTX.
After the investigation concluded, Sullivan & Cromwell responded to Cleary’s findings. “Sullivan & Cromwell remains confident in our pre-petition work for FTX and the commencement of the Chapter 11 cases, and we welcome the examiner’s findings to date rejecting various baseless allegations about our work for FTX,” Sullivan & Cromwell commented.
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