Sam Bankman-Fried sticks with Celsius’ Mashinsky’s legal team

Sam Bankman-Fried, the FTX founder found guilty of multiple fraud charges, has decided to retain his recently appointed lawyers despite potential conflicts of interest.

During a Wednesday hearing, U.S. District Judge Lewis Kaplan allowed Bankman-Fried to proceed with his defense team, consisting of Marc Mukasey and Torrey Young, after ensuring Bankman-Fried was making this choice with full awareness and understanding.

Bankman-Fried, dressed in an inmate uniform and sporting his recognizable curly hair, responded to Kaplan’s inquiries, indicating his desire to continue with Mukasey and Young’s representation. This decision comes after prosecutors raised concerns earlier in February about the new lawyers’ concurrent representation of Alex Mashinsky, the former CEO of Celsius Network, which was implicated in Bankman-Fried’s fraudulent activities.

“At sentencing, the Government will argue that Alameda Research’s lenders, including Celsius, were victims of the fraud, and that lenders are entitled to restitution. This has the potential to create a conflict in the representation of Bankman-Fried and Mashinsky,” prosecutors wrote in the letter. “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.”

Despite the potential for a conflict of interest, Bankman-Fried waived his right to conflict-free representation, a move scrutinized during the court session. Mukasey and Young, who officially joined Bankman-Fried’s legal team on January 9, are set to assist in the upcoming sentencing hearing due by February 26. Bankman-Fried faces a lengthy prison sentence, but his team is expected to argue for a significantly reduced term.

The backdrop to this legal drama includes Bankman-Fried’s November conviction on seven counts of fraud and conspiracy, tied to his dealings with lenders like Celsius and the manipulation of financial documents to favor his crypto fund, Alameda Research.

Mashinsky, facing separate charges for misrepresenting Celsius’s financial health and manipulating the value of its cryptocurrency, pleaded not guilty, with his trial scheduled for September. The intersection of Bankman-Fried and Mashinsky’s cases prompted the need for a Curcio hearing to address the conflict-of-interest concerns.