NEW YORK, Dec 6 (Portal) – Sam Bankman-Fried, founder and former chief executive officer of FTX, and Caroline Ellison, head of its now-defunct trading subsidiary, have brought in defense lawyers, according to a spokesman for FTX, while US authorities are investigating the collapse of the crypto -Exchange are investigating Bankman-Fried and a source familiar with Ellison’s selection.
Bankman-Fried has acquired Mark S. Cohen from Cohen & Gresser, Bankman-Fried spokesman Mark Botnick said in an emailed statement. Cohen could not be reached for comment.
Ellison, who ran trading firm Alameda Research, has hired Washington-based law firm Wilmer Cutler Pickering Hale and Dorr to represent her, a source familiar with the matter told Portal. Neither Ellison nor spokespersons for the company responded to requests for comment.
Regulators around the world, including in the Bahamas, where FTX is based, and in the United States are investigating the role of FTX’s top executives, including Bankman-Fried, in the company’s stunning collapse, Portal previously reported. The crypto exchange filed for bankruptcy last month after a liquidity crisis that saw at least $1 billion in customer funds disappear.
Prosecutors and regulators have not charged either Bankman-Fried or Ellison with a felony. You are facing civil lawsuits from FTX customers.
Stanford Law School professor David Mills is advising Bankman-Fried on the matter, Botnick said. Mills did not respond to requests for comment. Semafor previously reported on Mills’ consulting work for Bankman-Fried.
Cohen, a former assistant US attorney for the Eastern District of New York, recently defended Ghislaine Maxwell in her sex trafficking trial.
Bankman-Fried previously hired Martin Flumenbaum from the law firm of Paul, Weiss, Rifkind, Wharton & Garrison, but the law firm said last month it was no longer representing him due to conflicts.
A widely shared Twitter account previously named WilmerHale as Ellison’s attorney.
In recent weeks, US authorities have been soliciting information from investors and potential investors in FTX, according to two sources with knowledge of the requests. Federal prosecutors in New York are asking for details of any communications such firms have had with the crypto firm and its executives, including Bankman-Fried, the sources said. Bloomberg had previously reported on the information requests.
The Securities and Exchange Commission has also asked investors for similar information, one of the sources said.
These sources and attorneys have said, on condition of anonymity, that US authorities are likely to be looking for evidence of material misstatements of information to investors.
Spokesmen for the Manhattan Attorney’s Office and the SEC declined to comment on the information request.
FTX has secretly funneled client funds to its subsidiary Alameda Research to fill a gap at the crypto trading firm, Portal previously reported. The Wall Street Journal previously reported that Ellison and senior FTX officials knew the crypto exchange had dived into its client funds to help Alameda meet liabilities.
Speaking via video link to Andrew Ross Sorkin at the New York Times Dealbook Summit on Wednesday, Bankman-Fried said he did not knowingly mix client funds on FTX with funds from his own trading firm, Alameda Research.
“I have never attempted to commit fraud,” Bankman-Fried said, adding that he did not believe he was criminally responsible.
Additional reporting by John McCrank in New York and Jenna Greene in San Francisco; Edited by Megan Davies, Noeleen Walder, Leslie Adler and David Gregorio
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