March 27, 2024
Prosecutors Seek Hearing on Lawyers' Potential Conflicts
Latest Cryptocurrency News

Prosecutors Seek Hearing on Lawyers for Bankman and Mashinsky

The U.S. government has requested a hearing to address potential conflicts of interest in the criminal cases involving former FTX CEO Sam Bankman-Fried (SBF) and former Celsius CEO Alex Mashinsky, both facing charges of fraud. The government raised concerns about lawyers Marc Mukasey and Torrey Young, who have filed notices of appearances in both cases. In letters to the judges overseeing the cases, prosecutors called for a Curcio hearing to explore potential conflicts related to the involvement of these lawyers.

The letters highlighted the connection between Alameda Research, associated with FTX, and Celsius, where certain loans were repaid using customer funds. The government emphasized that conflicts could arise due to the intertwined relationship between Alameda Research and Celsius. Mashinsky had previously implicated Alameda Research, FTX’s sister firm, in Celsius’s collapse, potentially attributing it to SBF’s actions.

“Bankman-Fried may wish to argue at sentencing or in the event of an appeal that Celsius and similar lenders were not defrauded and are not entitled to restitution. Celsius, and potentially Mashinsky, may take a contrary position.”

The U.S. government acknowledged that judges could waive the potential conflicts, deeming them not “so ‘severe.’” However, the judges may initiate a Curcio hearing to question the potential conflicts of interest and whether both CEOs, Bankman-Fried and Mashinsky, are willing to waive their rights to “conflict-free representation.”

The letters pointed out that while Mashinsky’s allegations might assist in his defense, Bankman-Fried’s alleged manipulation of CEL could be considered relevant conduct during Bankman-Fried’s sentencing.

Bankman-Fried, indicted in 2022 following the collapse of FTX, was extradited to the U.S. from the Bahamas. After a trial that began in October 2023, he was convicted of seven felony counts related to fraud. His sentencing is scheduled for March 28.

Mashinsky, indicted on seven felony counts in July 2023, including securities fraud and wire fraud, resigned as Celsius CEO in September 2022. Currently free on $40 million bail, his trial is set for September 17.

These legal developments highlight the complexities and potential conflicts arising from the intertwined nature of crypto businesses, and the hearings will delve into the relationships between Alameda Research, Celsius, and the legal representation of the former CEOs. The outcomes of the hearings may impact the trajectory of the cases and the potential implications for the individuals involved.

Image by fabrikasimf on Freepik

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