- Mashinsky, former head of failed crypto company Celsius, will be represented by lawyers who also defended convicted FTX founder Bankman-Fried. This raises concerns about potential conflicts of interest.
- Mashinsky faces fraud charges related to inflating Celsius’ assets to defraud customers out of $42 million. Celsius claimed to have over $25 billion in assets but collapsed in bankruptcy in 2022.
- Lawyers Mukasey and Young declined to confirm they will represent Mashinsky. Mukasey previously worked for Trump Organization and defended Bankman-Fried. Mashinsky waived conflict concerns but hiring Bankman-Fried’s lawyers casts doubt.
Alex Mashinsky, the former boss of the collapsed crypto lending platform Celsius, will be represented by the same lawyers who previously defended convicted FTX founder Sam Bankman-Fried. This controversial decision raises concerns about potential conflicts of interest.
Mashinsky Faces Fraud Charges
Last year, Mashinsky was charged with fraud by the Department of Justice. He allegedly inflated the value of Celsius’ assets to defraud customers out of $42 million. Celsius claimed to have over $25 billion in assets under management. However, the company stopped withdrawals in June 2022 and filed for bankruptcy a month later.
Bankman-Fried Convicted of FTX Fraud
Sam Bankman-Fried co-founded FTX, one of the largest crypto exchanges. But in November 2022, FTX went bankrupt amid allegations of fraud. Bankman-Fried was later convicted of fraud, conspiracy and money laundering charges for mismanaging customer funds. He will be sentenced next month.
Lawyers Decline to Confirm Representation
The lawyers in question are Marc L. Mukasey and Torrey K. Young. Besides representing Bankman-Fried, Mukasey has also worked for the Trump Organization. When contacted by Decrypt, the lawyers declined to confirm they will represent Mashinsky. Their involvement raises potential conflict of interest issues given their previous work with Bankman-Fried.
Mashinsky Waives Conflict Concerns
According to reports, Mashinsky told a judge he is willing to waive any conflicts of interest in being represented by Bankman-Fried’s former lawyers. Mukasey is a high-profile attorney, but his firm’s past association with convicted fraudster Bankman-Fried casts doubt on the arrangement.
Conclusion
The collapsed companies Celsius and FTX have now intersected through their founders’ shared legal representation. It’s an ironic development given the criminal allegations against both Mashinsky and Bankman-Fried. The lawyers face questions about potential conflicts of interest as the cases unfold.
