FTX’s former chief regulatory officer has found himself involved in the failed cryptocurrency firm’s legal quagmire.
Daniel Friedberg has been sued by the new management of FTX and accused of helping enable the alleged crimes of former CEO Sam Bankman-Fried, silencing whistleblowers and assisting in “wide-ranging con game” to pilfer billions of customer funds.
Meanwhile, a report Thursday (July 6) by Bloomberg News citing legal documents, screenshots of messages involving Friedberg and interviews with ex-colleagues says this evidence paints the former executive as someone whose role with FTX went beyond offering legal advice.
(Bloomberg compares him to the title character in “Michael Clayton,” the movie about the morally compromised corporate fixer.)
Friedberg has not been criminally charged in the case involving the FTX collapse, which continues to shake the crypto world.
According to Bloomberg, however, he is apparently the same unnamed attorney mentioned in a report issued last week by FTX’s new management.
That report says this attorney — “Attorney-1” — helped cover up FTX’s commingling of customer and corporate funds and allowed false information to be passed onto customers, banks, auditors, investors and other third parties.
“Among the attorney’s alleged actions, the most brazen included falsifying a payment agreement between FTX and Alameda that was backdated by around two years and wet-signed by Bankman-Fried to avoid a DocuSign timestamp,” PYMNTS wrote last week.
The FTX report alleges this falsified document was submitted to an outside auditor, and widely shared with potential investors in connection with FTX’s $400 million Series C financing round that concluded in January 2022, 11 months before the exchange’s collapse.
It also alleges Attorney-1 offered a former Bahamian government official a $1 million “bonus” to secure a necessary business license for FTX within 10 weeks. A source told Bloomberg this attorney was Friedberg.
Bankman-Fried, 31, is set to go to trial in October on charges that include wire fraud and conspiracy. He has pleaded not guilty and remains free on bail.
According to the Bloomberg report, in addition to helping FTX set up shell companies and work with officials in the Bahamas, Friedberg also served as the company’s representative in the $135 million deal to change the name of the NBA’s Miami Heat stadium to the FTX Arena.
“Sam is a remarkable man,” Friedberg reportedly told local officials in a meeting. “His job every day is to try to make as much money as he can for charity.”
“He cares most about compliance and doing the right thing,” Friedberg added.