Former FTX executive accused of helping Sam Bankman-Fried carry out fraud

By 
 June 30, 2023

The cryptocurrency trading trading platform FTX made headlines last year following its dramatic collapse. This week saw one of its former executives accused of paying hush money to facilitate billions worth of fraud. 

According to the New York Post, Dan Friedberg has been accused in a lawsuit filed by the company's new executives of helping company founder Sam Bankman-Fried defraud clients.

Friedberg is said to have engaged in "whitewashing complaints by whistleblowers"

Friedberg, who was previously an attorney for FTX and also served as the firm's chief regulator officer, is alleged to have acted as a "fixer" for Bankman-Fried.

This is said to have included "whitewashing complaints by whistleblowers" as well as paying "exorbitant hush money" to an FTX employee who became aware of the wrongdoing.

"With regard to multiple whistleblower complaints alleging corporate malfeasance, Friedberg served as Bankman-Fried’s fixer," the Post quoted the lawsuit as stating.

FTX seeks to recovers millions worth of unearned bonus payments from Friedberg

"He not only settled the complaints for inflated amounts, in some instances he arranged for the FTX Group to retain the whistleblowers’ attorneys post-settlement, thereby buying or otherwise ensuring their silence," it added.

What's more, the lawsuit contends that Friedberg himself received millions of dollars in unjustified bonus checks, funds which the company is now seeking to recover.

"Plaintiffs seek to recover damages caused by breaches of Friedberg’s fiduciary duties, legal malpractice, and other wrongdoing, and to recover all amounts fraudulently transferred to Friedberg, including any cryptocurrency, bonuses, and any other things of value," the complaint states.

FTX was not Friedberg's only employer, as he was simultaneously serving as the general counsel at Alameda Research, a cryptocurrency hedge fund founded by Bankman-Fried's ex-girlfriend Caroline Ellison.

FTX founder gave $40 million to left-wing candidates and political action committees

In addition to his alleged financial chicanery, Bankman-Fried also drew attention for his status as one of the Democratic Party's super donors.

Breitbart reported in November of last year that Bankman-Fried donated $40 million to Democratic politicians and left-wing political action committees (PACs).

What's more, Fox News revealed that other members of Bankman-Fried's family also made hefty donations to Democratic causes.

That included his parents, Joseph Bankman and Barbara Fried, as well as his brother, Gabe Bankman-Fried, who collectively gave away hundreds of thousands of dollars.

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