Former FTX Chief Lawyer Claims US Legal Counsel Channeled Business to S&C

The former FTX chief regulatory officer has backed a motion to prevent FTX from retaining Sullivan & Cromwell LLC as its principal bankruptcy counsel.

A former FTX general counsel has accused the firm’s US general counsel of directing business to Sullivan & Cromwell (S&C), which is currently functioning as FTX’s bankruptcy counsel.

Daniel Friedberg, FTX’s chief regulatory officer until his resignation on November 8, made the charges in a court filing on January 19.

The declaration was made in support of an FTX creditor’s opposition to FTX’s proposal to retain S&C as its lawyers throughout its bankruptcy process.

Friedberg claims in the affidavit that FTX.US lead counsel Ryne Miller, a former partner at S&C, directed business to his old law firm in a number of matters, stating:

“Mr. Miller informed me that it was very important for him personally to channel a lot of business to S&C as he wanted to return there as a partner after his stint at the Debtors.”

According to the complaint, Friedberg reminded Miller that his “allegiance” was to the debtor, not to S&C, which he said “continued to be a problem throughout his service” at FTX.

Friedberg claimed that after Miller was hired in early 2020, he inquired whether he might hire his former law firm, to which Friedberg answered that it was Miller’s obligation “to only pick the best outside counsel for the position.”

Miller ultimately hired S&C as FTX’s primary counsel.

Friedberg authored for US, FTX Derivatives (previously LedgerX), and Sam Bankman-holding Fried’s firm Emergent.

S&C has also served as personal counsel to Bankman-Fried and another major FTX officer, Nishad Singh, he said.

While the petition is merely a declaration in support of an FTX creditors’ objection to the employment of FTX lawyers Sullivan & Cromwell LLP, it makes a number of previously unknown charges.