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FTX U.S. channeled business to S&C, alleges former Chief Regulatory Officer

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FTX U.S. channeled business to S&C, alleges former Chief Regulatory Officer

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  • Former FTX legal counsel accused the firm’s U.S. general counsel of channeling business to S&C.
  • S&C allegedly served as personal counsel to Sam Bankman-Fried and another key FTX executive.

Former FTX Chief Regulatory Officer Daniel Friedberg has accused the firm’s U.S. general counsel of channeling business to Sullivan & Cromwell (S&C), who were allegedly serving as FTX’s bankruptcy counsel.

FTX CRO alleges issues with S&C

Friedberg, who was the exchange’s chief regulatory officer until his resignation on 8 November 2022, made the allegations in a court filing on 19 January 2023.

The declaration was made after a creditor objected to the exchange’s plan to retain S&C as its lawyers throughout the bankruptcy case.

Friedberg claimed that FTX. U.S. lead counsel Ryne Miller, a former partner at S&C, directed business to his former law firm in several cases. As per the filing, Friedberg reminded Miller that his allegiance was to the debtor, not to the S&C — which he suggested continued to be a problem throughout his stint at the exchange.

The former Chief Regulatory Officer stated:

“Mr. Miller informed me that it was very important for him personally to channel a lot of business to S&C as he wanted to return there as a partner after his stint at the Debtors.”

S&C also served as personal counsel to SBF

Friedberg further alleged that Miller had hired S&C to be the primary counsel for FTX. U.S., FTX Derivatives (formerly LedgerX), and Sam Bankman-Fried’s holding company, Emergent. He also mentioned that S&C had served as personal counsel to Bankman-Fried and another key executive.

While elaborating on SBF’s connection with S&C, Friedberg stated:

“S&C represented all of these groups simultaneously without proper conflict waiver. S&C also represented Sam and Nishad personally. The lawyers in this important bankruptcy proceeding should be independent and not have a history of representing all of the various groups and the principals at one time.”

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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