Sam Bankman Freed continues to work with new attorney despite potential conflict

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From Reuters

Sam Bankman Fried, the imprisoned founder of bankrupt cryptocurrency exchange FTX, appeared in court Wednesday for the first time since his November fraud conviction, and is facing new charges despite a potential conflict of interest. He confirmed that he intends to continue cooperating with his lawyers.

Bankman Freed, 31, hired defense attorneys Mark Mukasey and Torrey Young in January to represent him until his March 28 sentencing. A jury in Manhattan federal court found the former billionaire guilty of stealing billions of dollars from FTX customers, and he could face decades in prison.

In a brief hearing before U.S. District Judge Lewis Kaplan in Manhattan, Bankman Fried also represented Alex Mashinsky, the founder of bankrupt crypto financial company Celsius Networks. Mr. Mukasey and Mr. Young have both pleaded not guilty to separate fraud charges.

Kaplan asked Bankman-Fried, wearing a tan prison shirt and chains around his ankles, to describe the potential conflict in his own words.

“At a high level, they also represent Alex Mashinski,” said the clean-shaven Bankman Freed. His curly hair has grown longer since the month-long trial last year.

Bankman Fried described Celsius as “a company that I ran and had a business relationship with.”

Mukasey, a former federal prosecutor in Manhattan and the son of former U.S. Attorney General Michael Mukasey, was once part of former President Donald Trump's personal legal team.

He also represented Trevor Milton, the founder of electric and hydrogen truck maker Nikola. Milton was convicted last year of fraud for lying to investors about the company's technology and sentenced to four years in prison, far less than the 11 years that prosecutors had suggested.

Bankman Fried told Kaplan that he had consulted with attorneys Mark Cohen and Christian Everdell, who represented him during the trial, about a possible confrontation with Mukasey. Bankman Fried said she also discussed the matter with Alexandra Shapiro, another attorney who ultimately handled the appeal.

Mr. Mukasey said Mr. Cohen and Mr. Everdell will soon ask Mr. Kaplan for permission to withdraw from the case.

In a Feb. 6 court filing, prosecutors in Bankman Fried's case said his Alameda Research hedge fund used stolen FTX customer funds to repay funds borrowed from Celsius. said. Prosecutors said Bankman-Fried and Mashinsky may have different views on whether Celsius was defrauded and is entitled to compensation.

Bankman Fried, who has been held at Brooklyn's Metropolitan Detention Center since August 2023, said Wednesday that he takes antidepressants and Adderall, which is used to treat attention-deficit hyperactivity disorder. During her trial, Bankman Freed's lawyer said in October that she needed a higher dose of Adderall than she was given each morning in prison to help her concentrate.

Mashinski, 59, waived his right to an attorney absent a potential contest at a hearing Tuesday before U.S. District Judge John Koeltl. Mr. Mukasey and Mr. Young said at that hearing that they could fairly represent both Mr. Bankman Freed and Mr. Mashinski.

Mr. Mashinski is out on bail. A trial is scheduled for January 28, 2025, on charges that he artificially inflated the value of the company's internal crypto tokens and made $42 million by selling his stock holdings.