Prosecutors concerned that Mashinsky, Bankman-Fried have same lawyers

Prosecutors filed letters with the judges overseeing both Sam Bankman-Fried and Alex Mashinsky’s cases because the two have some of the same lawyers

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FTX co-founder Sam Bankman-Fried | Getty Images modified by Blockworks

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US prosecutors are asking Judge Lewis Kaplan for a hearing “concerning potential conflicts of interest” because two attorneys in the Sam Bankman-Fried case are representing another ex-CEO: Alex Mashinsky. 

Marc Mukasey and Torrey Young represent both Bankman-Fried and Mashinsky.

Mashinsky, formerly the CEO of Celsius, was charged by the Department of Justice last year. He’s facing seven counts, including securities and wire fraud. 

Prosecutors also filed a letter with Judge John Koetl, who’s overseeing the case against Mashinsky.

“As the trial evidence in United States v. Bankman-Fried established, Celsius lent money to Alameda Research, and certain loans were repaid by Alameda Research to Celsius using customer funds. The relationship between Alameda Research and Celsius creates the potential for conflicts in several respects,” the filing said. 

Read more: Where crypto’s major bankruptcies stand right now

If Bankman-Fried were to argue either at his sentencing — which is in late March — or at an appeal down the road that lenders, including Celsius, were not defrauded by Alameda, then it could create a conflict of interest for the two attorneys.

The other potential conflict comes from the records access that the attorneys have in both cases.

“If defense counsel views something in the Bankman-Fried materials that they believe may be useful to Mashinsky, they will be limited in their ability to share that information with Mashinsky or use it in Mashinsky’s defense, and the same is true for any Mashinsky materials they may believe would be useful to Bankman-Fried at sentencing,” the filing said.

The prosecutors, however, noted that the “potential conflicts are not so ‘severe.’” They have requested a hearing in both cases with the judges to review any “potential conflicts of interest.”

The attorneys, according to the filings, agreed to the hearings.

Bankman-Fried was found guilty of all seven counts late last year. Both FTX and Celsius filed for bankruptcy. Celsius has since exited bankruptcy, though FTX continues to work through its proceedings after scrapping plans to reboot the exchange.


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