FTX sues its former chief compliance officer Dan Friedberg: what does it mean for FTX creditors?

FTX is suing its ex-chief compliance officer, Dan Friedberg. What impact could this have on FTX creditors?

FTX has filed a lawsuit against its former Chief Compliance/Regulatory Officer, Dan Friedberg, involving multiple serious allegations. Henri Arslanian, founder of the cryptocurrency hedge fund Nine Blocks, has deciphered the key content of the lawsuit document and analyzed its impact on FTX’s creditors.

According to the lawsuit, Friedberg was hired due to pressure from SBF’s father, who believed that “someone needed to handle everything.” Friedberg’s annual salary was $300,000, a signing bonus of $1.4 million, 8% of FTX US, and other bonuses such as a $3 million bonus in 2021 that includes Serum tokens worth over $30 million.

According to the disclosed information: Friedberg was responsible for establishing many shell companies that FTX used to open accounts; Friedberg paid hush money to buy silence from all parties; Friedberg also prepared various loan agreements worth over $2 billion that FTX offered to its founders (these loans obviously have not been repaid).

What does this mean? First of all, these are serious allegations that indicate that there is a real power/political power game within FTX. It is not yet certain whether these allegations are supported by real evidence. But overall, it is positive because it shows that FTX/the liquidator is doing everything possible to pursue former employees who benefited from FTX fraud.

Reference: https://twitter.com/HenriArslanian/status/1675888468038172672

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