- Former leaders of collapsed giants Celsius and FTX have shared the same legal team.
- Celsius has accused FTX’s subsidiary of complicating the task for their joint lawyers.
- Concerns have arisen over the lawyers’ ability to fairly represent both due to a protective order for SBF’s records.
A potential conflict of interest has emerged in the ongoing legal cases surrounding the collapse of cryptocurrency giants Celsius and FTX. US prosecutors have called for a hearing to address concerns that the shared legal representation of both former CEOs, Alex Mashinsky (Celsius) and Sam Bankman-Fried (FTX), could compromise the integrity of the proceedings.Â
The issue stems from the involvement of lawyers Marc Mukasey and Torrey Young, who previously represented Bankman-Fried and now also represent Mashinsky.
FTX and Celsius in Dual Representation Drama
Prosecutors argue that this dual representation raises concerns about the potential for confidential information sharing and competing interests, particularly given the complex legal landscape surrounding both cases. One key point of contention centers on Celsius’s status as a potential victim in a fraud case involving FTX’s subsidiary, Alameda Research.
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Mashinsky has accused Alameda of manipulating the price of Celsius’s native token, CEL, through “secret abilities” to borrow unlimited funds on FTX. This raises questions about how the defense attorneys can effectively represent both parties while navigating these potentially conflicting narratives.
Further concerns arise from a protective order granting limited access to certain records related to Bankman-Fried. Prosecutors argue that this restriction could hinder the attorneys’ ability to fully represent Mashinsky without violating their obligations to Bankman-Fried.
Judge to Question in “Curcio Hearing”
To address these concerns, prosecutors have requested a “Curcio hearing,” where the judge can directly question Mashinsky about his understanding of the potential conflicts and whether he knowingly waives his right to conflict-free representation.
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The hearing will also likely delve into the proposed solutions, such as waiving specific conflicts or appointing additional counsel. If the judge finds that the potential conflicts are too severe, it could lead to the disqualification of the current lawyers or even the dismissal of charges.
On the Flipside
- Even if the judge finds a potential conflict of interest, they may not disqualify the attorneys if they demonstrate that they have taken adequate steps to mitigate the conflict.
Why This Matters
This shared legal representation raises questions about the fairness of the proceedings, as confidential information from one case could impact the other, especially with potentially conflicting narratives surrounding Celsius’s role in the FTX collapse.
If you’re interested in learning more about FTX’s financial situation and its efforts to repay its customers, you can read this article:
FTX Petitions to Dump 8% Stake in OpenAI Rival Anthropic
If you’re interested in learning more about SIM-swapping attacks and how to protect yourself from them, you can read this article:
$400M FTX Hack Linked to SIM Swap Ring as DOJ Cracks Down
