{"id":29136,"date":"2023-06-29T10:40:27","date_gmt":"2023-06-29T14:40:27","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/ftx-files-lawsuit-against-ex-compliance-chief-friedberg-over-alleged-hush-money-payments\/"},"modified":"2023-06-29T10:40:28","modified_gmt":"2023-06-29T14:40:28","slug":"ftx-files-lawsuit-against-ex-compliance-chief-friedberg-over-alleged-hush-money-payments","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=29136","title":{"rendered":"FTX Files Lawsuit Against Ex-Compliance Chief Friedberg Over Alleged ‘Hush Money’ Payments"},"content":{"rendered":"
\n

Defunct crypto exchange FTX\u2019s lawyers are suing the company\u2019s former compliance chief officer Daniel Friedberg for paying off insiders who threatened to reveal the exchange’s illegal activities.\u00a0<\/p>\n

The lawsuit alleges that the former compliance chief served as a “fixer,” paying “exorbitant hush money” to potential whistleblowers who threatened to expose the executives\u2019 alleged misappropriation of user funds.<\/p>\n

Friedberg faces 11 charges, including, breach of fiduciary duty, legal malpractice, corporate waste and several counts of fraudulent transfers, according to the lawsuit filed Tuesday.<\/p>\n

Damages related to some of the mentioned charges will be determined at trial.\u00a0<\/p>\n

Friedberg Allegedly Played A Key Role In FTX\u2019s Fraudulent Schemes\u00a0<\/h2>\n

As per the complaint, Friedberg allegedly played a key role in FTX’s former management\u2019s fraudulent scheme.<\/p>\n

The former compliance officer used his insight into the business to hold together \u201ca house of cards\u201d as he allegedly broke several laws in doing so.\u00a0<\/p>\n

Friedberg served as the chief compliance officer to FTX US and as well as general counsel to its trading arm Alameda Research from 2017 until the firm filed for bankruptcy in November last year.\u00a0<\/p>\n

The lawsuit aims to reclaim payments plus interest related to the former compliance chief\u2019s $300,000 salary at FTX US, a $1.4 million signing bonus, an 8% equity stake in the crypto exchange, and a $3 million payment from the trading arm Alameda.<\/p>\n

FTX\u2019s lawyers are also seeking the return of 102 million Serum tokens.<\/p>\n

SBF helped launch Serum, Solana-based decentralized exchange (DEX), with the Solana Foundation in 2020.\u00a0<\/p>\n

At its current value, Friedberg’s SRM tokens are estimated to be worth $12.2 million.<\/p>\n

As per the lawsuit, Friedberg fired an attorney working for Alameda Research dubbed \u201cWhistleblower-2\u201d after they \u201cbecame concerned about governance and regulatory issues\u201d within the crypto firm.<\/p>\n

FTX In Talks To Relaunch The Exchange<\/h2>\n

As reported<\/u> earlier, now defunct exchange FTX is having initial talks with investors on reviving the international exchange through a joint venture.\u00a0<\/p>\n

FTX is expected to undergo a complete rebranding process that could involve potential compensation arrangements for some specific clients, a source told Wall Street Journal.<\/p>\n

These specific current clients could receive compensation through the provision of ownership stakes in the restructured crypto exchange.\u00a0<\/p>\n

John J. Ray III, appointed as FTX CEO during the bankruptcy proceedings, confirmed that the company has begun the process of reaching out to stakeholders for the relaunch of the FTX.com exchange.
\u00a0<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Defunct crypto exchange FTX\u2019s lawyers are suing the company\u2019s former compliance chief officer Daniel Friedberg for paying off insiders who threatened to reveal the exchange’s illegal activities.\u00a0 The lawsuit alleges that the former compliance chief served as a “fixer,” paying “exorbitant hush money” to potential whistleblowers who threatened to expose the executives\u2019 alleged misappropriation of […]<\/p>\n","protected":false},"author":1,"featured_media":29137,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-29136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"\nFTX Files Lawsuit Against Ex-Compliance Chief Friedberg Over Alleged 'Hush Money' Payments | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Defunct crypto exchange FTX\u2019s lawyers are suing 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