A former lead lawyer for FTX accused the company's general counsel in the United States of transferring business to Sullivan&Cromwell, which currently provides bankruptcy counsel to FTX.

Toni Fried Herbert (Daniel Friedberg), who served as FTX's chief control officer until she left office on Nov. 8, made the charges in a court filing on Jan. 19.

In the announcement, Fred Herbert claimed that Ryan Steiger, FTX's general counsel in the United States and a former partner of Scylla C, had transferred the business process to his former law firm in many cases. Fred Herbert said:

Mr. Steiger told me that it was important for her personally to deliver a lot of business processes to Debtors because she wanted to return as a partner after working for a period of time.

Robert Lee Stark, a lawyer and former responsible person for the office of the Securities and Exchange Commission Internet Technology Inspection Company, described the seriousness of the accusation in a tweet on January 20th.

Fred Herbert said in the document that he reminded Steiger that the man was loyal to the borrower, not SignorC, but that this was a problem for FTX as a whole.

Fred Herbert claimed that after Steiger was hired in early 2020, Steiger knew whether he could hire his previous law firm. Fred Herbert replied that Steiger's job was to "hire better outside lawyers for this job."

Fried Herbert wrote that Steiger ended up hiring SignorC as key legal counsel for FTX US, FTX derivatives (formerly LedgerX) and Nick Bankman-Fried's holding company, Emergent.

Fried Herbert also reprimanded Steiger for earmarking $200m in LedgerX assets to cover legal and regulatory costs, saying: "LedgerX has more than $200m in capital, and he sent these assets to Scylla, so it is not a matter to close down the legal and regulatory costs."

Management decision to make a call

Although this document is only a statement that the FTX debtor resists the preservation of FTX lawyer Sullivan&Cromwell LLP, it gives a number of previously unpublished allegations.

Fred Herbert apologized at the last minute, saying that he had no time to submit Dietrich's filling statement. McGinnis Dietrich, a partner of SignorC, submitted this statement, which applies to the resolution of the FTX to keep Signorc as lead counsel.

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At the end of his statement, Fred Herbert determined that, once required to testify, he would "qualify the objective facts set out in the slogan of this Declaration".

The hearing system is scheduled to be held in the bankruptcy court on January 20, where the presiding judge will seek advice from all parties concerned, and then determine whether FTX can keep Signorc as lead counsel.

Cointelegraph has contacted FTX for comment.