Bankrupt cryptocurrency exchange FTX sued one of its former top lawyers, accusing him of aiding fraud by company founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing at the company.
Friedberg “whitewashed” complaints from employees raising concerns about the activities of FTX and Alameda by settling claims for “inflated” amounts and in some cases hiring law firms that represented whistleblowers to perform legal work for FTX, the company said.
The settlement amounts are redacted in the complaint.
A lawyer for Friedberg and a spokesperson for FTX did not immediately respond to requests for comment.
The lawsuit accuses Friedberg of legal malpractice and breaching his fiduciary duty. It seeks to claw back “tens of millions” worth of cryptocurrency Friedberg received while working for FTX, along with his compensation and $3 million in bonuses.
FTX filed for bankruptcy in November 2022 after a run on customer deposits. The company’s new leadership has accused Bankman-Fried and his associates of widespread failures to implement corporate controls.
At least three other FTX executives have pleaded guilty to U.S. charges.
Friedberg has cooperated with U.S. investigations into the FTX collapse, Reuters has reported.
Friedberg served as an adviser to Bankman-Fried and his companies while working at law firm Fenwick & West. He became an in-house attorney at both FTX and Alameda in 2020.
