The US government has requested a hearing to address potential conflicts of interest in the criminal cases of former FTX CEO Sam “SBF” Bankman-Fried and former Celsius CEO Alex Mashinsky, both facing fraud charges.
Prosecutors, in letters to the respective judges overseeing the cases on Feb. 6, expressed concerns about lawyers Marc Mukasey and Torrey Young, who are involved in both cases.
The letters highlight that Celsius had lent money to Alameda Research, FTX’s sister firm, and some loans were repaid using customer funds. This relationship raises potential conflicts, as Bankman-Fried may argue against fraud claims involving Celsius, while Celsius and Mashinsky might take a different stance. The U.S. government emphasized the need for a Curcio hearing to address these concerns.
Mashinsky had previously attributed Celsius’ collapse partially to Alameda Research, suggesting a connection to SBF’s actions. Despite potential conflicts, prosecutors suggested that judges could waive them, deeming them not “severe.” Bankman-Fried and Mashinsky might have the option to waive their rights to conflict-free representation.
The letters also noted that Mashinsky’s allegations could be relevant to his defense, while in Bankman-Fried’s case, his alleged manipulation of CEL might be considered during sentencing. Bankman-Fried, indicted in 2022, faced trial in October 2023, resulting in a conviction on seven felony counts related to fraud. His sentencing is scheduled for March 28.
Reports indicate that SBF may not face a second trial, given his previous conviction. Mashinsky, indicted on seven felony counts in July 2023, is currently free on $40-million bail, with his trial set for September 17. The developments in these cases underscore the complexities and potential conflicts in the legal proceedings involving prominent figures in the crypto industry.