Daniel Friedberg, the former compliance chief officer of the now-defunct cryptocurrency exchange, is the target of legal action brought by FTX. In the lawsuit, Friedberg is charged with bribing those who were threatening to reveal the unlawful operations of the exchange and had knowledge of them. In the case, Friedberg is portrayed as a “fixer” who used sizable quantities of money as “hush money” to intimidate potential whistleblowers who alleged that the exchange’s officials had misappropriated customer funds. There are 11 allegations against Friedberg in the lawsuit, which was filed on Tuesday. These include fiduciary responsibility violations, professional negligence, business waste, and fraudulent transfers. During the trial, the damages entailed by some of these accusations will be established.
Friedberg Allegedly Played A Key Role In FTX’s Fraudulent SchemesÂ
The complaint claims that Daniel Friedberg, the former compliance officer of FTX, was a key player in a deceptive scheme hatched by the prior management. It is alleged that Friedberg engaged in a number of illegal measures to maintain a precarious situation by exploiting his inside information about the company. From 2017 until the firm filed for bankruptcy in November of the previous year, Friedberg held the post of chief compliance officer at FTX US and additionally worked as general counsel for Alameda Research, the exchange’s trading division.
The goal of the case is to collect funds associated with Friedberg’s FTX US compensation, including his $300,000 salary, a $1.4 million signing bonus, an 8% equity stake in the cryptocurrency exchange, and a $3 million payment from Alameda, the trading arm. The legal team for FTX also demands the return of 102 million Serum tokens.
It should be remembered that SBF, under the direction of the Solana Foundation, launched the Serum tokens in 2020. The market value of Friedberg’s SRM tokens is at $12.2 million.
According to the lawsuit, Friedberg fired “Whistleblower-2,” an attorney for Alameda Research, when the lawyer voiced concerns about governance and regulatory problems at the cryptocurrency company.
FTX In Talks To Relaunch The Exchange
According to reports, FTX, which was previously shut down, is in preliminary talks with investors about reviving the global exchange through a partnership. The business is thinking of rebranding completely, which could involve offering some clients compensation. An insider claims that as payment for their services, these particular clients may be given ownership holdings in the reorganized bitcoin exchange. The company has started the process of contacting stakeholders to explore the relaunch of FTX.com, according to John J. Ray III, who took over as FTX CEO during the bankruptcy proceedings.
