FTX Group Pays $25 Million to Settle Whistleblower Claims, Including Allegations of Market Manipulation: Investigator Report

Bankrupt cryptocurrency exchange FTX paid more than $25 million to six anonymous whistleblowers who discovered problems at the company, according to an investigator’s report released Thursday.

One of the whistleblowers was described as an executive at FTX.US, according to a report filed Thursday by investigator Robert Cleary. Bankruptcy Judge John Dorsey appointed Cleary, who prosecuted the Unabomber case in the late 1990s, as examiner after the appeals court ruled. january FTX had to be investigated by an independent investigator.

The anonymous whistleblower said FTX Group “misled regulators and investors and lacked an appropriate corporate structure” including former CEO Sam Bankman-Fried, former FTX engineer Nishad Singh; I sent a letter to former FTX attorney Dan Friedberg.

“Soon after, Friedberg told Whistleblower-4 that he should not have written the letter, and especially should not have implied that FTX Group might not meet investors’ expectations. Friedberg also suggested that Whistleblower-4 apologize to Bankman-Fried .” the examiner wrote.

The whistleblower later resigned in September 2022 and agreed to a settlement of more than $16 million, according to the report.

Separately, another whistleblower who alleged market manipulation and insider trading settled for $1.8 million after working at FTX.US for less than two months with a salary of $200,000.

Another whistleblower was offered a $200,000 settlement after alleging market manipulation and a “concealment of relationships.”

The examiner noted that FTX Group did not have a current or complete list of employees at the time it filed for bankruptcy.

“A further complication is that FTX Group employees resigned informally, both verbally and through signals,” investigators said.

Several former employees, including the former president of FTX.US, resigned before the exchange collapsed. Brett HarrisonFormer co-CEO of Alameda to step down in September 2022 Sam TrabuccoResignation in August 2022.

FTX collapsed in November 2022 and has since been in bankruptcy proceedings, and a New York jury found Bankman-Fried a year later. feeling guilty It is one of seven criminal counts that defrauded FTX’s customers, lenders and investors. He was later sentenced to 25 years in prison.

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