A former lawyer for FTX, the bankrupt crypto exchange Sam Bankman-Fried, detailed everything he knew about the company’s dealings during a meeting with officials from the U.S. Department of Justice (DOJ), Federal Bureau of Investigation (FBI), and Securities and Exchange Administration (SEC) . It is reported by Reuters.
The meeting with attorney Daniel Friedberg and prosecutors took place at the office of the U.S. Attorney for the Southern District of New York on Nov. 22, the source said. Friedberg said he was aware of Bankman-Freed’s use of client funds to finance his other firms. He also provided information about the operations of trading firm Alameda Research, the source said.
However, Friedberg was not charged with the crime. He expects to be called as a government witness in the Bankman-Freed trial in October.
Friedberg’s lawyer, Telemachus Kasoulis, the FBI and FTX did not respond to requests for comment on his cooperation. The Securities and Exchange Commission, the Justice Department and a spokesman for Bankman-Fried also declined to comment.
After the FTX crash, there were reports that billions of dollars worth of customer funds were funneled into Alameda. This was confirmed by the former head of the firm Caroline Ellison. She stated that she understood that it “was wrong” to take out loans from FTX without risk management or collateral. According to her, she has been aware of the harmfulness of this practice since 2019.
The New York City Attorney’s Office has created an FTX Task Force to track down and recover missing customer funds, estimated to be at least $2 billion in total. Bankman-Fried is charged with conspiracy to defraud, embezzlement of FTX user funds, misuse of company assets, and money laundering. However, he pleaded not guilty to fraud and other charges brought against him.
Source: cryptocurrency.tech
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