Sam Bankman-Fried set to ditch trial lawyers before sentencing

Sam Bankman-Fried set to ditch trial lawyers before sentencing
Credit: Rita Fortunato/DL News
  • Shackled crypto mogul appears in court over procedural issue.
  • Bankman-Fried is using same lawyers as Celsius co-founder Mashinsky, who faces trial.
  • Former FTX chief is expected to be sentenced in March.

Lawyers who represented Sam Bankman-Fried during his trial last year are expected to withdraw from his case ahead of his sentencing in March, according to an attorney hired by the disgraced crypto founder.

Bankman-Fried’s trial lawyers, Mark Cohen and Christian Everdell, plan to submit resignation paperwork on Wednesday, the attorney said.

Bankman-Fried appeared in court Wednesday for the first time since November 2, when a federal jury in Manhattan found him guilty of stealing billions from customers of his failing crypto exchange, FTX.

Celsius lawyers

Shackled at the ankles and wearing a beige oversize shirt and trousers, the 31-year-old entrepreneur told a federal judge he wanted to keep newly hired lawyers Marc Mukasey and Torrey Young despite a potential conflict of interest: both also represent Alex Mashinsky, founder of bankrupt crypto lender Celsius.

Mashinsky was arrested in July on seven criminal charges that he defrauded and deceived the crypto lender’s customers.

On Tuesday, Mashinsky appeared before a different federal judge and waived his right to object to any issues that might arise as a result of the potential conflict of interest facing Mukasey and Young.

Prosecutors requested the hearings, arguing Celsius was a victim of Bankman-Fried’s fraud.

“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,” prosecutors wrote in their request. “Celsius, and potentially Mashinsky, may take a contrary position.”

Join the community to get our latest stories and updates

Potential conflicts

On Wednesday, Bankman-Fried said he was aware of these potential conflicts and would nevertheless retain Mukasey and Young. Bankman-Fried also waived his right to object to any future issues raised by their potential conflict.

Mukasey did not give a reason for the withdrawal of Cohen and Everdell. During the trial, however, they often seemed overmatched by Assistant US Attorney Danielle Sassoon and her fellow prosecutor, Nicolas Roos.

The government produced a stream of damaging witnesses that included former customers, lenders, and employees.

Most damning of all were three members of Bankman-Fried’s inner circle: Ellison, FTX co-founder and chief technology officer Gary Wang, and FTX head of engineering Nishad Singh.

The defence did little to damage their credibility. When it was time to put on a case of their own, Bankman-Fried’s lawyers called only three witnesses: Bankman-Fried’s attorney in the Bahamas, a financial analyst, and, finally, Bankman-Fried himself.

The last was a hail mary play that may have done more harm than good.

When questioned by his own attorney, Bankman-Fried seemed poised. On cross-examination, however, he was evasive and made to answer for misleading public statements before and after FTX’s collapse, many of which were contradicted by documentary evidence and witness testimony.

Mukasey, a former federal prosecutor in the Southern District of New York, has represented other high-profile clients, including former President Donald Trump, Florida Representative Matt Gaetz, retired Navy SEAL Eddie Gallagher, and Trevor Milton, the founder of electric truck manufacturer Nikola.

Aleks Gilbert is a New York based reporter covering DeFi. Got a tip? Email him at aleks@dlnews.com.