FTX crypto exchange founder, Sam Bankman-Fried, is expected to employ an ‘advice of counsel’ defense tactic in his impending fraud trial. The heart of this strategy is to assign the blame, for the alleged illegalities, to what he sees as dubious advice provided by in-house counsel and a notable Biglaw firm.
In essence, Sam Bankman-Fried is claiming reliance on the advice from the legal counsel, asserting that this negates any criminal intent to defraud. The defense argument draws on the notion that the advice obtained from the lawyers – experts in the legal field – informed his actions. This, he believes, should shield him from criminal culpability.
The identity of the Biglaw firm that provided the advice is not disclosed in the article, generating speculation within the legal community.
The ‘advice of counsel’ defense is a commonly used strategy, particularly in white-collar crime cases. It relies on the premise that the defendant had sought and adhered to advice from legal counsel on a matter that later results in allegations of criminal conduct. Typically, proof of consultation in good faith, in addition to demonstrating the following of the provided advice, is crucial to make this defense successful.
However, the strategy doesn’t always clear defendants of charges. The advice provided must have included all relevant information and be given in response to such. Moreover, the law firm itself could potentially also face scrutiny over its role.
While the trial’s outcomes are uncertain, it certainly underscores the importance of sound legal advice in businesses, especially in relatively new and complex areas like cryptocurrencies.
Read more about the case here.