Bankman-Fried Judge Recuses Self Over Potential Conflict

The judge overseeing the case against Sam Bankman-Fried has recused herself, citing a potential conflict.

According to court documents filed Friday (Dec. 23), federal judge Ronnie Abrams will step down from the case because her husband, Greg Andres, is a partner at Polk Davis & Wardell, a law firm that advised Bankman-Fried’s cryptocurrency company FTX last year.

While Andres himself had no dealings with FTX, Abrams decided to recuse herself “to avoid any possible conflict or the appearance of one.”

In her order, Abrams also noted that Davis Polk & Wardwell had represented parties “that may be adverse to FTX and Defendant Bankman-Fried,” though Andres apparently did not represent those clients either.

Abrams’ recusal capped a hectic week in the case of Bankman-Fried, which began with him agreeing to be extradited to the U.S. to face a slew of federal charges related to the multi-billion dollar collapse of FTX.

Bankman-Fried, 30, was free on bail last week after posting $250 million bail and is due in court again on Jan. 3. He was ordered to live at his parents’ home in California, be electronically monitored, and limit his travel to parts of California and New York.

Last week also saw the news that two of Bankman-Fried’s top lieutenants — Alameda Research CEO Caroline Ellison and FTX co-founder and engineering leader Gary Wang — pleaded guilty to charges against them and agreed to cooperate with authorities.

As PYMNTS reported, Ellison and Wang will likely be key witnesses, due to their proximity to Bankman-Fried and their knowledge of FTX’s inner dealings, admissions of guilt, and stated willingness to work with prosecutors.

Ellison said in her guilty plea that she was “truly sorry” for the role she played in FTX’s collapse, which has left more than a million creditors seeking billions in restitution. In pleading guilty, she admitted she conspired to use billions of dollars from FTX customer accounts to repay loans that crypto platform Alameda had taken out to make risky investments.

In addition, other FTX executives had created special settings that gave Alameda an unlimited line of credit, another offense Ellison was aware of during her tenure with the company.

“I also understood that many FTX customers invested in crypto derivatives and that most FTX customers did not expect that FTX would lend out their digital asset holdings and fiat currency deposits to Alameda in this fashion,” Ellison said in the testimony.

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