- The bankrupt crypto exchanges sued S&C over alleged involvement in fraud.
- FTX’s creditors have cited S&C’s financial benefits from FTX’s misconduct.
The embattled cryptocurrency exchange FTX has launched a legal action against law firm Sullivan & Cromwell (S&C) over allegations of fraud involvement. The creditors are accusing S&C of playing a role in FTX’s alleged multibillion-dollar fraud scheme.
According to court documents filed on February 16, S&C is accused of being complicit in FTX’s deceptive practices and financial mismanagement, purportedly benefiting from the exchange’s illicit activities.
The class-action lawsuit by FTX creditors seeks reparation for various counts, including civil conspiracy and aiding and abetting fraud and fiduciary breaches.
Ryne Miller, a former partner at S&C who later transitioned to FTX Group as general counsel, is at the center of this controversy. Miller’s alleged funneling of cases from FTX to S&C amplifies concerns regarding potential conflicts of interest and ethical breaches within the legal space.
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FTX’s Former CEO Close Ties With Sullivan & Cromwell
FTX’s former CEO Sam Bankman-Fried’s close ties with S&C blur the boundaries between legal representation and corporate affiliations. Reports suggest Bankman-Fried frequented S&C’s New York offices, raising questions about the relationship between FTX and its legal advisors.
S&C has denied any wrongdoing, emphasizing its limited engagement with FTX’s entities before the bankruptcy proceedings. The firm contends that it never served as primary outside counsel to FTX, seeking to dispel allegations of impropriety.
However, concerns regarding S&C’s impartiality persist. Calls for an independent examination of the bankruptcy case underscore the need for transparency and accountability in navigating complex legal disputes within the cryptocurrency sector.
