Conflict of Interest Costs SBF His Lawyers

Add this to the list of troubles befalling FTX founder Sam Bankman-Fried this month: his law firm has reportedly stopped representing him due to an apparent conflict of interest.

Paul Weiss – a nearly 150-year-old firm that has represented companies like Amazon and PayPal – said it has stopped representing the 30-year-old ex-CEO, Bloomberg reported.

“We informed Mr. Bankman-Fried several days ago, after the filing of the FTX bankruptcy, that conflicts have arisen that precluded us from representing him,” Paul Weiss counsel Martin Flumenbaum told Bloomberg in a statement.

While the nature of the conflict is unclear, the Bloomberg report noted that Flumenbaum represents Christian Larsen, chairman of blockchain firm Ripple Labs. Paul Weiss did not immediately respond to PYMNTS’ request for comment.

Bankman-Fried, often known by the handle “SBF,” is at the center of a maelstrom of civil proceedings and criminal investigations stemming from the implosion of the FTX exchange earlier this month.

Among the latest developments: a request by U.S. Sens. Elizabeth Warren, D-Mass., and Dick Durbin, D-Ill. for an accounting of business practices and financial activities performed before and after the company collapsed.

A letter to Bankman-Fried and current CEO John J. Ray III noted that investor funds worth billions of dollars seem to have “disappeared into the ether.”

“These massive losses raise questions about the behavior of former FTX CEO Sam Bankman-Fried and other company executives, the apparent lack of due diligence by venture capital and other big investment funds eager to get rich off crypto, and the risk of broader contagion across the crypto market that could multiply retail investors’ losses — all of which ‘call into question the promise of the industry,’” Warren and Durbin wrote.

This week marked the start of FTX’s bankruptcy hearing, which began with James Bromley, representing the firm’s new management, describing the company as being “run as a personal fiefdom of Sam Bankman-Fried.”

FTX owes its 50 largest creditors an astounding $3.1 billion, with the top 10 creditors each due more than $100 million. Bromley said in court Tuesday (Nov. 22) that a “substantial amount” of FTX Group’s assets “have either been stolen or are missing.”

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