Friedberg joined a meeting on Nov. 22 in the U.S. Attorney for the Southern District of New York office with Federal Bureau of Investigation, Department of Justice, and Securities and Exchange Commission officials.
In the meeting, Friedberg explained how FTX’s sister trading firm, Alameda Research, worked. FBI agents reportedly contacted Friedberg a few days after the crypto exchange filed for Chapter 11 bankruptcy protection in November. He is not under criminal investigation and expects to be a witness in Bankman-Fried’s trial, which is scheduled for October.
Charges on Friedberg
Bankman-Fried is charged with fraud and accused of misusing billions of dollars worth of FTX customer funds and funneling them into Alameda. He pled not guilty in a New York federal court. In contrast, his counterparts, former Alameda Research CEO Caroline Ellison and former FTX CTO Gary Wang, pled guilty to fraud charges in December.
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.
Friedberg’s cooperation has not been previously reported. He has not been charged and has not been told he is under criminal investigation, the source said. Instead, he expects to be called as a government witness in Bankman-Fried’s October trial, the person said. Friedberg’s lawyer, Telemachus Kasulis, the FBI and FTX did not respond to requests for comment on his cooperation. The SEC, the Department of Justice and Bankman-Fried’s spokesman declined to comment.
Bankman-Fried is charged with fraud and accused of misusing billions of dollars worth of FTX customer funds and funneling them into Alameda. He pled not guilty in a New York federal court. In contrast, his counterparts, former Alameda Research CEO Caroline Ellison and former FTX CTO Gary Wang, pled guilty to fraud charges in December.
Manhattan U.S. Attorney Damian Williams, who is leading the criminal case against now bankrupt FTX, said last month: “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of 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. A lawyer for Ellison didn’t respond to a request for comment. Wang’s lawyer declined to comment.
