Cryptocurrency exchange FTX has filed a lawsuit against its former executive, Daniel Friedberg, accusing him of unethical practices and using “hush money” to silence potential whistleblowers. FTX alleges that Friedberg acted as a “fixer” for the family of one of the exchange’s co-founders, Sam Bankman-Fried. The lawsuit claims that Friedberg offered bribes to employees to prevent them from disclosing FTX’s alleged fraudulent practices and close relationships with Alameda Research. FTX also accuses Friedberg of hiring one of the whistleblowers’ lawyers and making payments to ensure their silence. The complaint includes allegations of fraudulent transfers, loans to former FTX executives, and breaches of legal obligations. FTX is seeking to recover the significant compensation package that Friedberg received during his tenure. The sums received by the whistleblowers were redacted for confidentiality purposes, but it is disclosed that Friedberg settled with one of them for $200,000. Another whistleblower, identified as an attorney from Alameda Research, alleges that Friedberg terminated their employment due to governance and regulatory concerns. Recently, FTX’s restructuring head implicated a senior attorney in facilitating the commingling of customer funds, with anonymous sources identifying Friedberg as the lawyer in question. Friedberg has not yet commented on the allegations.
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