SBF’s lawyers discontinue FTX’s representation due to conflicts of interest

Investors are concerned because Genesis Global, GBTC’s liquidity provider, claimed on November 16 that it had blocked withdrawals due to “extraordinary market turbulence,” which resulted in massive withdrawals from its platform that exceeded its current liquidity.

Genesis is a subsidiary of Digital Currency Group (DCG), a crypto-focused venture financing firm that also owns Grayscale.

GBTC is trading at a nearly 43% discount to its net asset value, owing in part to market uncertainty over GBTC’s exposure to Genesis.

However, the move spurred conjecture that the cryptic tweets were designed to divert bots’ attention away from concurrently removed tweets.

While there was no evidence of malice, Paul, Weiss attorney Martin Flumenbaum claimed that SBF’s “constant and disruptive tweeting” was hampering the restructuring efforts.

The decision by the law firm to withdraw from assisting SBF coincided with the much-anticipated judgment of fellow fraudster Elizabeth Homes, who was sentenced to prison after being convicted of criminal fraud.

SBF is currently under investigation in several areas, including the misuse of customer funds and the disclosure of bankruptcy-related records.

Despite telling the defendants, the court may deny an attorney’s motion and force them to continue representation — which may appear difficult given the legal firm’s concerns about SBF’s behavior.

Binance CEO Changpeng “CZ” Zhao recently revealed that Binance was almost ready to bail out FTX from a collapse. He reflected on the situation and stated,

“When he came to me, I knew he was desperate. If we can’t help him, there’s probably nobody else that would. Probably a bunch of people passed on the deal before us.”