Former FTX lawyer tipped off US prosecutors on SBF fund abuse: Reuters

Quick Take

  • Former FTX lawyer Daniel Friedberg shared information about the crypto exchange and Alameda Research with the SDNY court, the SEC and the FBI.

Collapsed crypto exchange FTX's former top lawyer, Daniel Friedberg, shared his knowledge of founder Sam Bankman-Fried’s use of customer funds with U.S. prosecutors.

Friedberg joined a meeting on Nov. 22 in the U.S. Attorney for the Southern District of New York office with Federal Bureau of Investigation, Department of Justice, and Securities and Exchange Commission officials, Reuters reported — citing a source close to the matter and confirmed by scheduling emails.

In the meeting, Friedberg explained how FTX’s sister trading firm, Alameda Research, worked.

FBI agents reportedly contacted Friedberg a few days after the crypto exchange filed for Chapter 11 bankruptcy protection in November. He is not under criminal investigation and expects to be a witness in Bankman-Fried’s trial, which is scheduled for October.

Bankman-Fried is charged with fraud and accused of misusing billions of dollars worth of FTX customer funds and funneling them into Alameda. He pled not guilty in a New York federal court on Tuesday. In contrast, his counterparts, former Alameda Research CEO Caroline Ellison and former FTX CTO Gary Wang, pled guilty to fraud charges in December.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.