Sullivan & Cromwell law firm refutes accusations of involvement in FTX fraud, citing successful bankruptcy proceedings and investor compensation plans as evidence of their innocence.

In response to the lawsuit filed by FTX investors, Sullivan & Cromwell has moved to dismiss the claims against them, dismissing the allegations as baseless. The firm asserts that the investors are already in line to receive compensation through the FTX bankruptcy process, rendering the lawsuit redundant. Sullivan & Cromwell argues that the plaintiffs' pursuit of damages duplicates the restitution that will be provided through the bankruptcy proceedings.

Despite their role as legal counsel for FTX leading up to its collapse in November 2022, Sullivan & Cromwell maintains that no direct fraud accusations have been leveled against them. They emphasize that providing legal services to a client does not imply knowledge or involvement in any fraudulent conduct.

Sullivan & Cromwell has played a crucial role in guiding FTX through its Chapter 11 restructuring in Delaware, accruing over $180 million in fees for their services. The firm views the bankruptcy proceedings as a resounding success, ensuring that FTX has secured ample funds to compensate all affected customers fully.

FTX recently announced that it has amassed adequate resources to cover customer losses, with creditors expected to receive complete reimbursements based on the value of their crypto assets at the time of the bankruptcy, plus interest. This development underscores Sullivan & Cromwell's stance that the bankruptcy process will sufficiently address investor compensation, rendering the lawsuit unnecessary.

The lawsuit against Sullivan & Cromwell is part of a broader examination of third-party advisers and influencers allegedly linked to FTX. The Moskowitz Law Firm, representing a group of investors, has accused Sullivan & Cromwell of aiding and abetting fraudulent activities at FTX, prompting a court review to assess potential conflicts of interest during the bankruptcy proceedings.

The controversy surrounding Sullivan & Cromwell's association with FTX has had repercussions, leading to the firm losing a significant assignment as an external monitor for the crypto exchange Binance.