FTX Lawyers Charge Sam Bankman-Fried With 'Twitter Assault'

FTX Lawyers Charge Sam Bankman-Fried With ‘Twitter Assault’

FTX lawyers have accused Sam Bankman-Fried of trying to disrupt his crypto empire’s bankruptcy proceedings through a “Twitter attack.”

In recent weeks, Bankman-Fried has accused Sullivan & Cromwell, the law firm representing FTX in its Chapter 11 proceedings, of pressuring him to bankrupt companies, including the US arm, in numerous tweets and blogs. of FTX, that the former billionaire’s claims were creditworthy. The firm has denied those claims.

James Bromley, a partner at Sullivan and Cromwell, told a court hearing on Friday that the firm is “fighting a ghost” in trying to address Bankman-Fried’s public criticism of its role in representing FTX in the bankruptcy without be able to question him in court.

“One of the things that debtors have generally faced in these cases is the Twitter attack,” Bromley said.

The comments came at a hearing where the bankruptcy court was considering a motion by two FTX clients seeking to block Sullivan’s appointment due to what they claimed were conflicts of interest stemming from the company’s previous work for the crypto group. .

The judge ultimately denied the motion. “There is no evidence of any real conflict here,” Judge John Dorsey said.

The decision paves the way for Sullivan to potentially earn millions of dollars in fees representing FTX in its attempt to reimburse account holders. Dorsey noted that FTX had contracted with other law firms that could be called upon if a dispute arose.

Bromley’s hearing and comments point to how the high-profile FTX case and social media will complicate efforts to restructure the crypto exchange and return money owed to millions of creditors.

Another former FTX member, his top attorney Dan Friedberg, on Thursday launched new allegations against Sullivan over alleged conflicts of interest in a last-minute court filing before the hearing. The judge described the submission as filled with “hearsay, speculation and rumours” and “not something I would allow to be admitted into evidence.”

Earlier this week, Sullivan filed dozens of pages of additional details about nearly $10 million worth of legal work he did for the Bankman-Fried companies before filing for bankruptcy last year. Two former Sullivan attorneys also held senior legal positions at FTX.

Bromley said on Friday that the company should have been more forthcoming from the start in revealing the extent of its previous ties to the failed crypto group. “In retrospect, your Honor, we should have gone further in the original statement,” he told the court.

He also claimed that Bankman-Fried, who has pleaded not guilty to US fraud charges, and other insiders who “brought the company to its knees” are concerned about the information Sullivan is providing to prosecutors and regulators.

“They can throw rocks at debtors’ lawyers who are providing information to prosecutors,” he said.

The US Department of Justice had objected to the firm’s initial disclosure of its work for FTX and pushed for more information. Government lawyers said Friday they were pleased with the additional details Sullivan had provided.

Sullivan and Bankman-Fried declined to comment.

Separately, on Friday, US prosecutors confirmed they had seized approximately $700 million in cash and shares from Bankman-Fried, including more than $500 million in shares from the Robinhood trading platform.

The haul, detailed in a court filing, also includes funds held in three accounts on cryptocurrency exchange Binance, the values ​​of which were not disclosed.

The seizures took place in recent weeks, the government revealed, while Bankman-Fried was under house arrest in California after being released on $250 million bail. He faces eight criminal charges.

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