Former FTX Executives Agree to $1.36M Settlement over Fraud Allegations
Summary:
Former FTX executives, including co-founder Zixiao "Gary" Wang, have agreed to a roughly $1.36 million settlement with a class action group of the crypto exchange's past investors who alleged fraud. The executives will provide relevant case information but deny all allegations. Daniel Friedberg, former FTX regulatory officer, and several influencers, also reached settlements. The executives will also forfeit their assets for victim fund disbursement, with funds potentially distributed via the class suit rather than bankruptcy repayments.
In response to allegations of fraud, previous FTX executives and promoters have agreed to a settlement of approximately $1.36 million with a group representing the crypto exchange's former investors. Co-founder of FTX, Zixiao "Gary" Wang, former head of engineering, Nishad Singh, and former CEO of affiliated trading company Alameda Research, Caroline Ellison, have committed to sharing information relevant to the lawsuit, as stated in a court demand in Miami on March 27 seeking validation of the settlement. A settlement was also negotiated with a handful of other influencers, as well as Daniel Friedberg, FTX's former chief regulatory officer and head compliance officer for its US branch.
The former executives denied the lawsuit's accusations, yet the plaintiffs found the trio's insights useful in building a stronger case against other defendants, including famous personalities, corporations, and investors. An important aspect of Ellison's settlement is her declaration against ex-partner Sam Bankman-Fried, which could support the collective lawsuit.
Wang, Singh, and Ellison have started sharing all non-confidential documents and information used to assist authorities in sentencing their former boss, Bankman-Fried, to a 25-year prison term. Each of the three faces their own sentences after confessing to fraud. The plaintiffs will confirm their collaboration with the court prior to sentencing. They will also submit records from FTX's bankruptcy case and be present for depositions and hearings.
As a part of the agreement, the trio consented to surrender their assets for the court to dictate the recovery and allocation of funds to victims in their criminal case. The group is not to contest a claim by FTX investors that the funds should be distributed via the collective lawsuit, instead of FTX's suggested bankruptcy reimbursements or other litigation.
Finally, Friedberg too reached a settlement, the filings revealing that he has voluntarily "contributed valuable information" to the class action group and "consented to continue doing so". Friedberg's settlement indicates that he was not aware of the fraud at FTX and immediately quit and reported the crime once he became aware of it.
Several YouTubers and influencers also agreed to settlements to resolve the lawsuit, including Brian Jung's $180,000 payment, Kevin Paffrath's $122,000 payment, Tom Nash's $37,485 payment, Graham Stephan's $10,000 payment, and $5,000 each from Jeremy LeFebvre and Andrei Jikh.
Details about American footballer William Trevor Lawrence's settlement remain undisclosed, but it is assumed to be around $1 million based on the total disclosed relief subtracted from the sums of the other agreements.
All individuals part of the settlements are absolved "from all claims related to any alleged conduct resulting in this litigation".
Published At
3/29/2024 9:28:41 AM
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