The ongoing investigation against FTX founder Sam Bankman Fried also received input from former FTX top counsel Daniel Friedberg.
FTX's former top lawyer Daniel Friedberg has cooperated with US prosecutors as they probe the crypto firm's collapse, a source familiar with the matter said, adding to the pressure on founder Sam Bankman-Fried who was indicted last month on criminal fraud charges. was arrested in
Friedberg gave details about FTX in a meeting with two dozen investigators on November 22, the person said. The meeting, held at the US Attorney for the Southern District of New York, was attended by officials from the Justice Department, the Federal Bureau of Investigation and the US Securities and Exchange Commission, the source said. Emails between attendees scheduling meetings with those agencies were viewed by Reuters.
At the meeting, the source said, he told prosecutors what he knew about Bankman-Fried's use of customer funds to finance his business empire. Friedberg recalled conversations he had with other top executives on the subject and how Bankman-Fried's hedge fund Alameda Research operated, the source said.
Friedberg's collaboration has not been previously reported. The source said he has not been charged and has not been told he is under criminal investigation. Instead, he expects to be called as a government witness at Bankman-Fried's October trial, the person said.
Friedberg's attorney, Telemachus Kasulis, did not respond to requests for comment on his cooperation with the FBI and FTX. Spokespeople for the SEC, the Justice Department and Bankman-Fried declined to comment.
Bankman-Fried is accused of diverting billions of dollars in FTX client funds to Alameda to bankroll venture investments, luxury real estate purchases and political donations. On Tuesday, he pleaded not guilty in Manhattan federal court.
Manhattan US Attorney Damian Williams, who is leading the criminal case against the now-bankrupt FTX, said last month: "If you participated in misconduct at FTX or Alameda, now is the time to move past it."
Two of Bankman-Fried's closest associates, Caroline Ellison, Alameda's former chief executive, and Gary Wang, FTX's former chief technology officer, pleaded guilty to fraud and agreed to cooperate. An attorney for Ellison did not respond to a request for comment. Wang's lawyer declined to comment.
meeting with prosecutors
FTX filed for bankruptcy protection on November 11. A few days later, on November 14, Friedberg received a phone call from two FBI agents based in New York. He told them he was willing to share information, but needed to ask FTX to waive his attorney-client privilege, according to a person familiar with the matter and emails seen by Reuters.
Friedberg wrote to FTX the next day asking the company to waive his privilege so he could cooperate with prosecutors, according to emails seen by Reuters. FTX did not do so, but agreed with Friedberg on points he could make to investigators, the person said.
Friedberg then wrote back to the two FBI agents, telling them in an email reviewed by Reuters: "I wish to cooperate in every way."
According to an email exchanged by the source and participants, the US attorney's office set up a meeting where Friedberg signed so-called professor papers prepared for him by the SEC and other agencies. Offer letters usually describe a possible agreement between officials and individuals who are witnesses or subjects of an investigation.
"Through Thick and Thin"
Prior to his work advising FTX, Friedberg advised a mix of banking, fintech and online gaming companies.
One of his previous employers, a Canadian online gaming firm called Xcapsa Software, where he was general counsel, also courted controversy because of a fraud scandal involving a poker site called Ultimate Bet. In 2008 a Canadian Gambling Commission fined Ultimate Bet $1.5 million for failing to implement measures to prevent fraudulent activities. Excapsa has since disbanded.
According to an audio recording available on the website PokerNews, Friedberg and some other Ultimate Bet associates privately discussed that year how to handle the scam and reduce the amount of refunds owed to players. Friedberg had previously told NBC News that the audio was recorded illegally but the NBC article did not say that Friedberg challenged its authenticity.
Friedberg first represented Bankman-Fried in 2017 as outside counsel while at US law firm Fenwick & West, where he chaired its payment systems group, said a source familiar with the matter. At the time, the source said Friedberg advised Bankman-Fried to run Alameda, which he founded that year.
In 2020, when Bankman-Fried launched a separate exchange for US customers called FTX.US
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