Conflict of Interest Concerns Raised as FTX and Celsius CEOs Employ Same Legal Team

United States Prosecutors have alleged that there may be a conflict of interest over the fact that former CEO of now-defunct crypto exchange FTX Sam Bankman-Fried and bankrupt crypto lending platform CEO Alex Mashinsky have the same lawyers.

The prosecutors highlight that Celsius positions itself as a victim of Alameda Research. This only intensifies the entanglement between the two cases.

FTX and Celsius Defendants Share Lawyers

In a court filing, US prosecutors declare that lawyers Marc Mukasey and Torrey Young represent both Bankman-Fried and Mashinsky, which may present conflicts of interest.

“Mr. Mukasey’s and Ms. Young’s representation of defendants Bankman-Fried and Mashinsky in separate cases creates a potential conflict of interest; this potential conflict of interest, however, is waivable.”

Concerns are being raised because there is coloration between the two firms that each individual they are representing founded respectively. Mashinsky has at times blamed the fall of Celsius “on actions taken by Alameda Research,” including price manipulation of CEL.

Read more: Who Is Sam Bankman-Fried (SBF), the Infamous FTX Co-Founder?

Furthermore, prosecutors claim biases could arise as they’re restricted in sharing information with both parties despite viewing documents from both firms.

“Third, in this case, defense counsel has gained access to millions of records pursuant to a protective order, which will limit defense counsel’s use and disclosure of that information. That too creates the potential for conflict.”

Additionally, prior to Celsius’s bankruptcy, Bankman-Fried discussed Celsius’s financial condition with its executives. There were talks of FTX purchasing Celsius, with Bankman-Fried possibly replacing Mashinsky as CEO.

Prosecutors Say SBF and Alex Mashinsky Situation is ‘Not Severe’

The prosecutors allege that Bankman-Fried’s involvement during this period might provide relevant information for Mashinsky’s defense. However, the lawyers aren’t authorized to share it with Mashinsky.

However, the prosecutors asserted that the severity is not significant but can be reduced by adding another counsel.

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

Bankman-Fried’s parents recently claimed that they had no knowledge of the illicit actions of their son’s exchange. This was in an effort to dismiss the lawsuit against them.

On January 17, BeInCrypto reported that Bankman-Fried’s parents’ lawyers declared that they never occupied a directorial or any executive position at the now-defunct crypto exchange FTX or Alameda Research.