Bankrupt cryptocurrency change FTX sued one in all its former prime legal professionals, accusing him of aiding fraud by firm founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing on the firm.
The criticism, filed on Tuesday in US Chapter Court docket in Delaware, describes Daniel Friedberg, a former chief compliance officer at FTX and normal counsel of its associated crypto hedge fund Alameda Analysis, as a “fixer” for Bankman-Fried and different FTX executives who enabled the “wholesale raiding” of buyer funds.
Friedberg “whitewashed” complaints from staff elevating considerations concerning the actions of FTX and Alameda by settling claims for “inflated” quantities and in some instances hiring regulation corporations that represented whistleblowers to carry out authorized work for FTX, the corporate stated.
The settlement quantities are redacted within the criticism.
A lawyer for Friedberg and a spokesperson for FTX didn’t instantly reply to requests for remark.
The lawsuit accuses Friedberg of authorized malpractice and breaching his fiduciary responsibility. It seeks to claw again “tens of thousands and thousands” price of cryptocurrency Friedberg acquired whereas working for FTX, alongside together with his compensation and $3 million (roughly Rs. 24 crore) in bonuses.
FTX filed for chapter in November 2022 after a run on buyer deposits. The corporate’s new management has accused Bankman-Fried and his associates of widespread failures to implement company controls.
Bankman-Fried has been criminally charged in federal courtroom in Manhattan with stealing billions in FTX buyer funds to plug holes on the Alameda hedge fund and fund speculative investments. Bankman-Fried has pleaded not responsible and denied stealing funds.
A minimum of three different FTX executives have pleaded responsible to US expenses.
Friedberg has cooperated with US investigations into the FTX collapse, Reuters has reported.
Friedberg served as an adviser to Bankman-Fried and his corporations whereas working at regulation agency Fenwick & West. He grew to become an in-house legal professional at each FTX and Alameda in 2020.
© Thomson Reuters 2023
