Lawyer Involved With Online Poker Cheating Scandal Flips on FTX Founder

Written by:
Nagesh Rath
Published on:

Daniel Friedberg, the one time Compliance Officer for collapsed crypto exchange FTX, is now said to be cooperating with authorities.

Several other former FTX executives have also engaged counsel to discuss their cooperation with prosecutors, two separate sources told Reuters.  Emails between attendees scheduling a November meeting with law enforcement agencies were reviewed by Reuters.

Friedberg reportedly gave details about FTX and its founder, Sam Bankman-Fried, in a Nov. 22 meeting with two dozen investigators.  Bankman-Fried was recently extradited back to the U.S. from the Bahamas where he remains under house detention at his parents Palo Alto, California home.

From the Reuters report:

At the meeting, he told prosecutors what he knew of Bankman-Fried's use of customer funds to finance his business empire, the source said. Friedberg recounted conversations he had with other top executives on the subject and provided details of how Bankman-Fried's hedge fund Alameda Research functioned, the source said.

This is the first time we have known about Friedberg cooperating with the feds.

The former FTX exectutive once worked as an attorney for an online poker site caught up in an insider cheating scandal.  Audio of Friedberg apparently attempting to cover up the matter later surfaced.

This week, our colleagues over at CoinGeek reported on how Friedberg has tied to what it calls a "fake electronics company", suggesting it was a front for the funding scheme involving FTX.

Steven Stradbrooke of CoinGeek writes:

The SEC’s complaint against SBF (Sam Bankman-Fried) cited the billions that FTX customers had indirectly deposited to the exchange via a convoluted workaround involving an Alameda subsidiary called North Dimension Inc. SBF directed customers to deposit via North Dimension, whose website offered no indication of any ties to FTX/Alameda, to disguise the fact that these funds were instead going to Alameda (the funds were then credited to FTX customer accounts but not actually transferred to FTX).

North Dimension was incorporated in Delaware in August 2020, its incorporation papers drawn up by none other than Friedberg’s Fenwick & West. Last week, NBC News reported further details on North Dimension’s now-disabled (but archived) website, noting that it “appears to have been a fake electronics retailer.”

Registered in Hong Kong in November 2021, North Dimension’s website is replete with garbled English and most internal links default to the ‘about’ page.

FTX collapsed back in November, owing billions to investors and others, including a reported $3.1 billion to top 50 creditors.

- Nagesh Rath,

Business/Financial News

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