Due To Conflicts Of Interest, SBF Dropped FTX’s Legal Counsel
Martin Flumenbaum, an attorney, claimed that Sam Bankman-Fried’s “incessant and disruptive tweeting” significantly damaged the attorneys’ restructuring efforts.
Paul, Weiss, the law firm supporting FTX CEO Sam Bankman-Fried (SBF) during the company’s bankruptcy, withdrew as the entrepreneur’s legal counsel, alleging a conflict of interest. The decision to withdraw representation upon discovering SBF’s tweets disrupted the law firm’s reorganisation attempts.
On November 14, SBF launched a series of tweets that garnered significant attention on Crypto Twitter. However, this action-fueled rumours that the cryptic tweets were designed to prevent bots from seeing simultaneously removed messages. Martin Flumenbaum, an attorney at Paul Weiss, considered that SBF’s “incessant and disruptive tweeting” had a detrimental influence on the reorganisation efforts, notwithstanding the absence of evidence of malice.
“We informed Mr Bankman-Fried several days ago, after filing the FTX bankruptcy, that conflicts have arisen that precluded us from representing him.”
The legal firm’s choice not to represent SBF coincided with the much-anticipated sentencing of fellow fraudster Elizabeth Homes, who was sentenced to jail for criminal fraud.
SBF is now under examination from various angles, including continuing investigations into the abuse of client cash and the disclosure of bankruptcy-related information.
Despite telling the defendants, the court may deny an attorney’s request and force them to continue representation, which may seem difficult in light of SBF’s behaviour-related concerns stated by the legal firm.
Recently, Binance CEO Changpeng “CZ” Zhao said Binance was almost prepared to save FTX from collapse. Reflecting on the circumstance, he remarked:
“When he came to me, I knew he was desperate. If we can’t help him, there’s probably nobody else that would. Probably a bunch of people passed on the deal before us.”
However, the proposal for a takeover was terminated when a thorough investigation found more severe issues.
