Late on Friday, the judge who had been assigned to oversee the criminal trial of FTX founder Sam Bankman-Fried cited a potential conflict of reason as her reason to recuse herself from the case.
The judge disclosed that the law firm of her husband had advised the now-defunct crypto exchange, FTX, which had been launched by Bankman-Fried.
Hailing from the Southern District of New York, Federal Judge of the US District Court Ronnie Abrams opted to formally withdraw herself from adjudicating the blockbuster case.
She did so on Friday afternoon, just a day after SBF had been released from custody for staying at the Palo Alto home of his parents while he awaits trial.
A total of eight criminal charges have been filed against the former FTX CEO, which include conspiracy to commit money laundering, wire fraud, and violating federal campaign finance laws.
Greg D. Andres is Abrams’ husband and is a partner at Davis Polk & Wardwell. According to the order submitted by Abram, her husband’s law firm had advised FTX last year.
While her husband had not personally given any advice, the judge still chose to recuse herself because she wanted to avoid any possible conflict, or simply the appearance of it.
There were other details also mentioned in the order, such as the law firm had also represented parties that could be adverse to Sam Bankman-Fried and FTX.
However, it should be noted that the judge’s husband had not represented any of those clients personally either.
After the recusal, the Southern District of New York will now have to select a new judge to oversee the trial of Sam Bankman-Fried.
There has not been a timeline established for when the selection will take place. In such circumstances, judges are typically assigned to cases randomly.
If there is a possibility of a conflict of interest, they are then excluded from consideration.
It remains unclear as to why Abrams did not recuse herself earlier, as the connection of her husband’s law firm to FTX was probably not new information.
Judges who are considering recusing themselves from a case usually discuss such issues with the chief judge of their district as well as an ethics committee.
Plus, they also research precedent before a decision is made. On Thursday, Gabriel Gorenstein, another judge, had given approval of a deal that permitted SBF to be released from prison.
The deal involves an appearance bond worth $250 million, but the fallen crypto mogul did not have to pay it to the court.
This will only be applicable if he does not show up to court in the future. Meanwhile, he will live with his parents after being extradited to the US from the Bahamas where he had been arrested last week.
Even though the recusal of Abrams is not that extraordinary, it does highlight how the upper echelons of the business, academic and political elite in America are interconnected.