In a court filing dated June 27, FTX’s current leadership has sued the company’s former compliance officer, Daniel Friedberg, alleging breaches of duties and misconduct. Friedberg, who previously held positions such as Chief Compliance Officer at FTX and General Counsel at Alameda Research, is accused of causing the waste of company assets and assisting former FTX CEO Sam Bankman-Fried and other executives in diverting funds.
According to FTX, Friedberg established an entity called North Dimension to commingle and misappropriate funds. Additionally, the company claims that Friedberg created a “sham” intercompany agreement to conceal transfers when an audit was required for a planned IPO. Furthermore, Friedberg is accused of covering up whistleblower complaints related to the misuse and commingling of funds within the company. It is alleged that he terminated one whistleblower and provided a severance package as compensation.
The filing also states that Friedberg facilitated transfers amounting to billions of dollars to FTX executives, presenting them as company loans. However, these loans were not repaid and, according to the court document, could not have been repaid. FTX asserts that the early stages of the company were marked by insolvency and claims that Friedberg supported a scheme that defrauded and harmed customers.
As a result, FTX’s current management is seeking fines, damages, and disgorgements from Friedberg. The specific amounts will be determined in a future trial. These charges were filed as part of the company’s ongoing bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware. Recent reports indicate that FTX is making efforts to resume operations under its current leadership. Despite past incidents of missing or misappropriated funds, the company has managed to recover the majority of the owed amount of $8.7 billion to its users.