The federal judge assigned to oversee FTX founder Sam Bankman Fried’s case has recused herself because her husband’s law firm advised the bankrupt cryptocurrency exchange.
Ronnie Abrams, a district judge for the Southern District of New York, said in a court order on Friday that the law firm of Davis Polk and Wardwell LLP — where her husband is a partner — advised FTX in 2021.
The firm represented parties that may be adverse to FTX and to Bankman-Fried in other proceedings or potential proceedings, Abrams wrote.
“My husband has had no involvement in any of these representations,” she wrote in the filing. “These matters are confidential and their substance is unknown to the Court. Nonetheless, to avoid any possible conflict, or the appearance of one, the Court hereby recuses itself from this
In her place, Lewis Kaplan, a Manhattan federal judge, known for a no-nonsense demeanor in court, was assigned to Bankman-Fried’s case. Kaplan handled former US president Donald Trump’s libel suit against British Prince Andrew.
Bankman-Fried feigned ignorance about what was going on between the bankrupt crypto exchange FTX and its trading arm, Alameda Research, saying he did not do any compliance nor had he appointed any officers to do so.
Bankman-Fried spoke one word in court, saying “Yes,” when asked by Judge Abrams whether he understood the consequences of bail jumping.
As Bankman-Fried was released, prosecutors announced two central co-conspirators—former girlfriend Carolyn Ellison and FTX co-founder Gary Wang—had quietly pleaded guilty to charges of fraud and conspiracy and agreed to cooperate, a development which added significant weight to the criminal case against Bankman-Fried.
The SEC and Commodity Futures Trading Commission filed related civil charges against former-girlfriends Ellison and Wang, saying that both played active roles in the scheme.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said in the announcement.
The 30-year-old crypto executive is charged with defrauding customers and investors.
“Mr. Bankman-Fried perpetrated a fraud of epic proportions,” assistant United States Attorney Nicholas Roos said. “The evidence is very strong.”