Potential Conflict of Interest Raises Concerns
US prosecutors have called for a thorough examination of the cases involving former Celsius CEO Alex Mashinsky and FTX founder and former CEO Sam Bankman-Fried. The concern stems from the potential conflict of interest arising from the shared legal representation of both crypto companies.
US Prosecutors Address Conflict of Interest
On Tuesday, the US government requested a hearing to address the potential conflicts of interest that could arise from the defense counsel’s representation of the defendants. Lawyers Marc Mukasey and Torrey Young, who previously represented FTX and Celsius CEOs, now represent Mashinsky. This raises concerns about compromising the integrity of the legal proceedings.
Legal Obligations and Conflict Resolution
US laws ensure defendants’ right to conflict-free legal representation. When a potential conflict of interest arises, the Court investigates and determines if the attorney is indeed compromised. If confirmed, the Court has an obligation to disqualify the attorney if the conflict is severe.
Celsius Allegations and Conflict of Interest
Prosecutors note that Celsius’s status as a victim in the fraud involving FTX’s subsidiary, Alameda Research, may create a conflict in the simultaneous legal representation of Bankman-Fried and Mashinsky. Mashinsky’s claims of Alameda Research’s “secret abilities” to manipulate Celsius’s token, CEL, on FTX raise conflict of interest concerns.
Protective Order and Information Sharing
The defense counsel’s limitation in sharing information from Bankman-Fried’s records, due to a protective order, may also lead to a potential conflict of interest between the two former crypto CEOs.
Proposed Questions for the Court
The US government has presented a set of proposed questions for the Court to ask the defendant as part of the Curcio inquiry, aimed at addressing the potential conflicts of interest.
