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Sam Bankman-Fried’s criminal conviction over the collapse of FTX should be vacated in part because the cryptocurrency exchange’s former lawyers at Sullivan & Cromwell “did an enormous amount of investigative work for the prosecution”, attorneys for the former billionaire have argued.

In a brief filed with the US Court of Appeals for the Second Circuit on Friday, Bankman-Fried’s counsel claimed he was denied a fair trial by “federal prosecutors eager for quick headlines” who co-opted former colleagues at the elite New York firm into gathering evidence for the government.

S&C, which advised FTX before providing counsel to the cryptocurrency exchange’s bankruptcy, “worked hand-in-glove with the prosecutors to charge and imprison Bankman-Fried, in ways that far exceeded normal ‘co-operation’,” they wrote.

In one instance, S&C lawyers “proactively recommended new areas of inquiry and helped guide prosecutorial strategy”, Bankman-Fried’s lawyers claimed, citing a December 2022 email to prosecutors, in which the law firm highlighted data “that resembles a transfer discussed by Sam Bankman-Fried in Signal chats” about a $45mn hole in an FTX balance sheet.

The firm collected more than 27mn documents for the government and provided notes of interviews with 24 FTX employees to prosecutors, they added.

Bankman-Fried, once one of the most celebrated American entrepreneurs, was sentenced to 25 years in prison in March over his role in the spectacular collapse of FTX, after being found guilty on seven counts of fraud and money laundering last year.

In their appeal against his conviction on Friday, Bankman-Fried’s lawyers claimed FTX had “faced a liquidity crisis, not a solvency crisis” at the time of its implosion and that the government’s allegation at trial that $10bn was “missing” was wrong, given that former account holders are set to receive cash worth more than 100 per cent of their official claims.

“The alleged victims didn’t ‘lose all their money’,” they wrote, adding that many of the investments Bankman-Fried made with customer deposits, such as a $500mn bet on AI start-up Anthropic, “were prescient”. 

They further blamed the conviction on S&C and John Ray III, who was installed to oversee the bankruptcy, claiming the law firm was part of a disturbing trend in which prosecutors are handed inculpatory evidence “on a silver platter” while exculpatory evidence is withheld.

S&C has faced repeated questions over its role as FTX’s bankruptcy counsel, given the legal work it did for the exchange in the months leading up to its implosion in November 2022.

In a paper published in March, two prominent law professors claimed S&C put its own interests before that of the exchange’s stakeholders, writing that the firm’s “apparent conflicts of interest permeated FTX’s bankruptcy filing and every aspect of the case”.

The law firm’s alleged conflicts are also being investigated by independent examiner and former prosecutor Robert Cleary, who was asked to look into the matter by the judge overseeing FTX’s bankruptcy.

In the first version of his report in May, Cleary largely absolved S&C of disqualifying conflicts of interest that would have undermined its restructuring advice. He recommended further inquiry into other matters, including some pre-bankruptcy transactions involving S&C, and is due to deliver his second report later this month.

In a previous court filing in Bankman-Fried’s criminal case, US prosecutors said the FTX debtors and S&C had “no involvement in any significant aspect of the government’s investigation and prosecution”. Sullivan and Cromwell has previously called allegations against it “baseless”.

Sullivan and Cromwell, the FTX debtors and the US attorney’s office for the Southern District of New York, which brought the case, declined to comment.

Janus Henderson is to become the latest large asset manager to experiment with securities tokenisation, joining a trend that industry observers believe will eliminate many costs, disrupting the industry.

The $360bn US asset manager plans to take over the management of the $11mn Anemoy Liquid Treasury Fund, which invests in short-term US Treasury bills. Tokenisation describes the process of converting units in a fund into unique digital tokens on a blockchain.

Janus Henderson follows in the footsteps of BlackRock, Fidelity International and Franklin Templeton, which are already running tokenised Treasury or money market funds on public blockchains.

It is dipping its toes into the world of on-chain capital markets by assuming the day-to-day running of the Anemoy fund, an open-ended British Virgin Islands-domiciled fund that launched in December and is open to non-US professional investors.

However, Nick Cherney, head of innovation at Janus Henderson, said the move was about “ensuring we are well positioned for the future”.

“There is a real opportunity to participate in and then help shape the future. I think it’s extremely likely that significant parts of the architecture of financial systems moves on to distributed ledger technology,” Cherney said.

“We see significant advantages in the way that financial services are delivered to clients. How this plays out in the next 5-10 years is not totally clear.”

Cherney believed blockchain technology had the potential to “eliminate a lot of steps, burdens and costs. It’s a more efficient way to take financial products and get them into the hands of investors with fewer intermediaries along the way”.

MJ Lytle, chief executive of Tabula Investment Management, the arm of Janus Henderson that will manage the fund, said management fees had fallen sharply in the investment industry, but costs had not fallen as fast, resulting in margin compression.

He believed blockchain technology had the potential to help tackle this. “It’s hard with traditional structures to bring costs down at the speed they need to be reduced,” Lytle said.

“Custody, administration, the basic execution and holding of assets, are very intensive processes at this point, with a heck of a lot of human beings involved,” he added.

“If you are one of the big custody and administration providers, it’s very hard to cut your cost base because it’s very difficult to cut the hundreds of thousands of people that work for you.”

“Trustless” decentralised blockchains offer the promise of stripping out some of these costs, Lytle believed. “You don’t need independent third-party custody, clearing etc. You can eliminate all of these costs,” he said.

Martin Quensel, chief executive and co-founder of Anemoy, a “Web3 native” asset manager, said tokenisation allowed investors to trade units in the fund at any time and benefit from “almost instant” settlement.

To facilitate this, it has assembled a network of paid market makers and liquidity providers, Quensel said.

Tokens in the fund, which currently yields more than 5 per cent, can also be used as collateral for other blockchain transactions, said Anil Sood, chief investment officer and co-founder of Anemoy.

He said they provided an alternative to so-called stablecoins such as USDC and Tether, digital tokens that are designed to be pegged to a real world asset such as the US dollar but have zero yield.

These stablecoins have now swelled to a combined market capitalisation of $170bn: if stablecoins were a country, they would now be the 18th largest holder of US Treasuries, ahead of South Korea and Germany, with $120bn of assets as of June, according to Tagus Capital, a crypto investment fund.

Anemoy is planning a second on-chain fund, investing in music-based intellectual property.

Sood, who has a background in exchange traded funds, believed that, in the long term, tokenisation could provide a threat to the fast-growing ETF industry, which is currently eating into the market share of more traditional mutual funds.

“We have seen a lot of people converting mutual funds into ETFs,” said Sood. “There will be a point in the future where this step will be missed out. Mutual funds will go straight into a digitised token structure.”

“When BlackRock, Fidelity, Franklin Templeton and Janus Henderson have participated in this space and they are talking to their clients about this, we know that it’s going to go beyond [its current niche] to mass adoption.

Cherney also believed this might be the case.

“If you go back 20 years in the ETF industry there were a small number of players who understood the ability to disrupt the investment industry. Today that’s obvious to virtually everybody,” he said.

“I think this is as disruptive, probably more disruptive, than ETFs. There is a significant probability that decentralised blockchain technology does to ETFs what ETFs have done to mutual funds.”

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The identity of Satoshi Nakamoto, the pseudonymous creator of bitcoin, remains the biggest mystery in the global crypto industry.

Countless articles and podcasts have been dedicated to finding the person, or people, who launched bitcoin, which is now the bedrock of a whole new asset class and billions of dollars’ worth of investments.

For some years, Australian computer scientist Craig Wright claimed to be Satoshi, based on his alleged evidence of a tech background, related meetings, and pages of documents.

But a UK court earlier this year put an end to the frenzied speculation — ruling that Wright is not the developer of bitcoin and saying that he had been extensively and openly lying. As a result, the true identity of Satoshi remains a mystery.

The challenge against Wright was made by the Crypto Open Patent Alliance (Copa), an industry group that is backed by companies including exchanges Coinbase and Kraken, software company Microstrategy, and Sam Altman’s cryptocurrency project Worldcoin. They sought to end Wright’s assertion to be Satoshi, a claim he has used to back claims for billions of dollars in damages against bitcoin developers for alleged thefts.

The curious case centred on the issue of intellectual property rights and proving that Wright did not have legitimate authorship claims over Satoshi’s bitcoin white paper, crypto’s important founding text. This was published in 2008, and describes a peer-to-peer payments system that stands apart from traditional financial institutions, relying instead on blockchain technology.

“It was an unusual beginning,” says Phil Sherrell, partner and head of the London office at law firm Bird & Bird, which represented Copa in the case. Wright was represented by Shoo­smiths. Instead of being a fraud trial, the focus was on showing that Wright did not have any rights over Satoshi’s bitcoin white paper and that he was not Satoshi.

“Ultimately, it always seemed likely to lead to a ‘Is he Satoshi?’ trial — the copyright ownership issue was the vehicle to get there,” explains Sherrell.

The case was brought after Wright began, in late 2020, emailing crypto developers and businesses that hosted the bitcoin white paper on their websites, asking them to take it down, recounts Sherrell. Crypto developers and executives “became concerned about where that might lead, and whether this was the start of a campaign in relation to other Satoshi IP rights”, he adds.

To prove that Wright was not Satoshi, Sherrell’s team began collecting evidence that would show he was lying. “It ultimately almost played out like a fraud trial — the whole focus of the litigation was to undermine the documents and information Wright relied on to try to prove he was Satoshi,” Sherrell says.

In one instance, the lawyers set about trying to disprove the legitimacy of handwritten notes. Some of the Brisbane-born computer scientist’s evidence relied on handwritten notes that he claimed had been written in the early 2000s, scribbles of ideas about bitcoin before the white paper was published.

Sherrell’s team tracked down the printer of the notepad in China, proving that the exact version of that notebook had not been released until years after Wright’s claims.

In another example, the lawyers picked apart Wright’s claims that some of his computer documents had been typed before 2008, using evidence from font designers. The witnesses testified that some fonts “hadn’t even been created until years after the alleged date of the document”, according to Sherrell. 

In the judgment handed down by the UK High Court in May, the presiding judge, Justice Mellor, said Wright “was not able to put forward any coherent explanation for the forgeries, which had been exposed, and yet he could not bring himself to accept that he was responsible for them”.

“Dr Wright lied to the court extensively and repeatedly,” the judgment concluded. “Most of his lies related to the documents he had forged . . . As soon as one lie was exposed, Dr Wright resorted to further lies and evasions.”

Sherrell says: “It became clear that everything that Wright said was based on things you could already find in the public domain about Satoshi’s life.”

A legal notice on Wright’s website now states that he is not Satoshi and that he has been ordered not to carry out any more legal proceedings based on these false claims.

“It’s a victory for common sense and justice,” says Sherrell.

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Once upon a time, Robinhood was the broker for renegade first-time investors who wanted to stick it to Wall Street. Three years on from the height of meme stock mania, the company wants to reclaim the disrupter crown for itself. That’s a far more interesting investment story, particularly if it figures out where its troublemaking can be best deployed.

Three consecutive quarters of net profitability have helped boost Robinhood’s shares by more than 50 per cent this year. It has been helped by market tailwinds too, notably from its crypto operations as trading in bitcoin has surged. In fact, its shares have tracked the crypto drama closely. Higher interest rates have also helped, with net interest revenues offsetting a slide in income from the rebates and payment for order flow that make up its trading core.

So far, so simple. But what does founder Vlad Tenev want Robinhood to be seen as? The place where the kids trade Nvidia while mom and pop sort their 401(k) retirement funds? A crypto hub with the air of an outlaw yet safe onshore US rules? Or some combination of the above in a superapp that combines more businesses such as payments and savings?

This year Tenev has made moves that fit all three. In June Robinhood bought crypto exchange Bitstamp — even as it faces an expected lawsuit over alleged violations of securities laws linked to crypto. By year-end, customers will have a web platform that should increase its appeal beyond smartphone-obsessed youngsters. In July it bought Pluto, an AI-based research platform. Back in March, meanwhile, it launched a credit card as part of its “gold” subscription service. Bitstamp also gives it an entrée with institutional investors, potentially opening up a different trading market entirely. 

Tenev has said that the credit card was “just the beginning”. That sounds like a superapp in the making, and those stories can rapidly become complicated.

Robinhood’s shares trade at 27 times forecast earnings, on the back of its straightforward growth tale. That is a premium to broking rivals. Interactive Brokers — serving institutional traders as well as retail — and Charles Schwab, which has a bank, trade on multiples of 18 and 17 respectively. Crypto exchange Coinbase, in contrast, is on 37 times.

Next month in Miami the broker is hosting its first customer conference with promises of “awesome” new products. After three years of association with a brief and ill-fated market mania, long-term investors should be looking for a clearer sense of the next chapter in Robinhood’s tale.

jennifer.hughes@ft.com