FTX Investigator Seeks to Probe Sullivan & Cromwell Over SBF Connections
Robert Cleary, the examiner assigned to investigate matters related to FTX’s bankruptcy estate, has filed a motion to delve deeper into the working relationship between Sullivan & Cromwell (S&C) and Sam Bankman-Fried (SBF), as well as the discrepancies in the balance sheet of FTX.US.
S&C’s handling of the bankruptcy estate has been under scrutiny, as the prominent law firm was involved in several transactions with the now-defunct crypto exchange before its downfall.
Cleary aims to uncover whether S&C had knowledge of any wrongdoing at the exchange, including allegations that the firm’s attorneys advised Bankman-Fried on the purchase of over 55 million Robinhood shares, and to what extent.
The motion emphasizes the importance of investigating this transaction to determine if there was a conflict of interest that should have been disclosed to the Court when considering S&C’s retention application.
Furthermore, the probe seeks to determine if S&C had any involvement in or knowledge of FTX’s significant crypto fraud scheme, in which Bankman-Fried and FTX co-founder Gary Wang purchased shares through Emergent Fidelity Technologies in 2023.
The filing also requests an examination into the “holes” in FTX’s balance sheet, aiming to identify the causes and potential resolutions for these discrepancies that may indicate misconduct or misuse of customer assets.
This latest development adds to the ongoing legal saga surrounding Sullivan & Cromwell’s ties to Sam Bankman-Fried and potential conflicts of interest. Critics have raised concerns about the law firm’s role in advising SBF while also leading its bankruptcy proceedings.
If approved, Cleary’s investigation is expected to last around 10 weeks and cost approximately $3 million. Bankman-Fried is currently serving a 25-year sentence for his involvement in the global digital asset scheme, while Wang’s sentencing is anticipated later this year.