• Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, is relying on advice from Silicon Valley law firm Fenwick & West in his defense against fraud charges.
• Bankman-Fried’s lawyers have requested documents related to the exchange’s compliance with US banking regulations and multimillion-dollar loans to FTX executives.
• If the government does not comply with this request, Bankman-Fried’s lawyers are seeking permission to subpoena the firm.
Sam Bankman-Fried Leverages Law Firm Advice for Fraud Defense
Sam Bankman-Fried, the disgraced founder of cryptocurrency exchange FTX, is preparing to argue that he relied on the advice of Silicon Valley law firm Fenwick & West in his defense against fraud charges. On Tuesday, his lawyers requested that prosecutors turn over documents that were provided to the government by the California-based firm between 2017 and 2022.
Bankman-Fried’s Defense Team Claims Legal Advice is „Material“
Bankman-Fried’s defense team reportedly claimed the legal advice by Fenwick & West is “material to preparing a defense.“ If the government does not comply with the request,the lawyers are seeking permission to subpoena the firm. The legal advice Fenwick & West provided is said to include use of encrypted messaging apps, multimillion-dollar loans to FTX executives, and compliance with US banking regulations.
Charges Against Bankman Fried
Bankman-Fried is accused of directing a yearslong fraud in which he allegedly used billions of dollars in FTX customer funds for risky investments, personal expenses, and political donations. However, a so-called advice-of counsel defense could be used to rebut suggestions that Bankman-Fried intendedto breakthe law.
Relationship Between Exchange and Law Firm Deteriorates
Subpoena Request Related To Silvergate Account
p>request for documents has placed further scrutiny on The relationship between FTX and Fenwick & West . The bank had said he couldn’t open such an account if FTX wasn’t licensed as a money services business in the US . While exchange ’s US platform was registered as such in 2020 ,law firm reportedly advised Bankmam – Fried at time that its international platform did not need same registration . Advice – Of Counsel Defense Could Be Used ByBankmnan – Fried < p > New York University law Professor Stephen Gillers said , “In other words , defendant ’ s argument is ‘my lawyers told me it was legal , I thought it was legal . ’” A so – called advice -ofcounseldefense could be used topreventsuggestions thatBNakamn – Friesndintendedtobreakthelaw . < br / >< br /> < b >< i >< span style = "text - decoration : underline ;" > Relationship Between Exchange and Law Firm Deteriorates < br / >< br /> p> relationship betweenFTXandfenwiick&westhasbeensentsubpeonasbylawenforcementandaccusedbyinvestorsinaclassactionsuitofaidingbanknamnfried’fraudSomeofthematerialrequestedbybankamnnfried’lawsyersarerelatedtoalledgedliestosilvergatebankinorderforhimopenanaccountin2020 whileexchange’usplatformwasregisterdassuchin2020lawfirmreportedlyadvisedbnankamnfrideattimethatitsinternationalplatformdidnotneedsameregistration.Sam Bankman-Fried Taps Law Firm to Fight FTX Fraud Charges