New Allegations Against Former FTX Chief Compliance Officer
Recent developments at the bankrupt crypto exchange FTX have unveiled a lawsuit filed by the new management against former Chief Compliance Officer (CCO) Daniel Friedberg. The lawsuit alleges his involvement in fraudulent activities and the payment of “hush money” to prevent exposure of these activities.
Key Points from the Lawsuit
- FTX accuses former CCO Daniel Friedberg of enabling fraud and providing hush money to whistleblowers.
- Two unnamed whistleblowers, referred to as Whistleblower-1 and Whistleblower-2, were allegedly paid off to maintain silence.
- FTX seeks to recover assets provided to Friedberg during his tenure at the exchange.
Details of the Lawsuit
FTX’s lawsuit includes various civil charges against Friedberg, citing breaches of legal duties, approval of fraudulent transfers, and granting loans to other executives. Friedberg received substantial compensation during his time at FTX, including salary, bonuses, equity, and crypto holdings.
The lawsuit claims Friedberg silenced potential whistleblowers to prevent disclosure of regulatory issues and connections between FTX and Alameda Research. He allegedly acted as a “fixer” for former CEO Sam Bankman-Fried and played a central role within the organization.
Specific details of payments to whistleblowers are redacted, but the lawsuit mentions an “extraordinary settlement” to a former employee named “Whistleblower-1.” This settlement was in response to allegations regarding Alameda’s involvement with FTX and manipulation of investor confidence.
FTX’s Path to Recovery
Despite the legal challenges, FTX is making strides towards relaunching its international crypto exchange. The company is in discussions with potential investors to reboot FTX.com and move towards a comeback in the crypto market.
Meanwhile, former CEO Sam Bankman-Fried’s attempt to dismiss criminal charges related to the FTX collapse was denied by a Manhattan judge, indicating ongoing legal battles for the company’s key figures.
