Former FTX Compliance Officer Dan Friedberg Accused Of Bribes: Report

Key Points:

• FTX sues former officer Friedberg over bribery allegations.
• Friedberg, known for past poker scandals, was implicated in FTX deception.
• FTX CEO investigates and seeks to recover funds; report points to his role.

FTX has filed a lawsuit against a former regulatory and compliance officer at the exchange, Dan Friedberg, saying he conducted a series of bribes to keep employees from reporting difficulties at the exchange.

Lawyer Friedberg, whose image was tainted by the greatest online poker scam a decade ago, may also be involved in deceptions perpetrated by collapsed cryptocurrency exchange FTX. Friedberg worked at UltimateBet during the company’s super-user cheating scandal and subsequent downfall, and he was captured on film supporting Russ Hamilton in his efforts to rescue the situation. Until recently, he was the Compliance Officer for FTX US and the general counsel for Alameda Research, a link that only became widely known in the poker community when the firm filed for bankruptcy in November 2021.

FTX filed a lawsuit against Daniel Friedberg on June 27. According to the lawsuit, Friedberg worked as a fixer for the exchange’s co-founder Sam Bankman-Fried, making hush money payments to two possible whistleblowers to prevent them from releasing information regarding regulatory difficulties, and FTX’s claimed strong relationships with Alameda Research.

As Bankman-Fried awaits trial on allegations of fraud and other offenses, the company’s new CEO, John J. Ray III, is heading an inquiry and seeking to retrieve as much investor money as possible. Ray’s most recent interim report, released on June 26, exposes the role of “a top FTX Group attorney” in alleged deceptions by the company’s leadership.

“The FTX Senior Executives did not commingle and misuse customer deposits by accident. Commingling and misuse occurred at their direction, and by their design. Bankman- Fried, with the assistance of a senior FTX Group attorney (“Attorney-1”) and others, lied to banks and auditors, executed false documents, and moved the FTX Group from jurisdiction to jurisdiction… to enable and avoid detection of their wrongdoing,” the report wrote.

Meanwhile, the Wall Street Journal reports that “Attorney-1” is Friedberg, citing people familiar with the situation. The report, for example, mentions Attorney-1 sending a $1 million incentive to a lawyer and former government official in the Bahamas. According to the WSJ‘s source, Friedberg paid this payment.

FTX issued 11 civil allegations in the 40-page petition, alleging, among other things, that Friedberg disregarded his legal obligations and facilitated a series of fraudulent transfers and loans to other former FTX executives.

Friedberg allegedly received a $300,000 salary, a $1.4 million signing bonus, and 8% stock in FTX US during his 22-month tenure at the exchange, all of which FTX is attempting to recoup, according to the lawsuit.

According to the Financial Times, the creators of cryptocasino Stake talked with Friedberg about their concept. Stake, on the other hand, has denied any link to him.

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Harold

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