Cryptocurrency
FTX alleges former exec used ‘hush money’ to silence whistleblowers
FTX has filed a lawsuit against a former regulatory and compliance executive at the exchange, alleging he made a series of payments attempting to prevent staff from blowing the whistle about the exchange’s issues.
On June 27, FTX filed a lawsuit against Daniel Friedberg who held multiple roles including chief regulatory officer at FTX, chief compliance officer of FTX US and general counsel at Alameda Research.
FTX claims Friedberg was a “fixer” for the exchange’s co-founder Sam Bankman-Fried — whose father urged for Friedberg to be given a major role, as per the complaint:
“Joe Bankman, Bankman-Fried’s father, urged Bankman-Fried and others to give Friedberg a central role and to keep Friedberg ‘in the loop…so we have one person on top of everything.’”
Friedberg allegedly made “hush money” payments to two potential whistleblowers to stop them from leaking information about “regulatory issues” and the alleged close ties between FTX and Alameda.
In one alleged incident, Friedberg retained the attorney of a whistleblower after he paid them “thereby buying or otherwise ensuring their silence,” the suit reads.
In the 40-page filing, FTX unleashed 11 civil charges that, among other claims, alleged Friedberg breached his legal duties and approved a series of fraudulent transfers and “loans” to other former FTX execs.
According to the suit, Friedberg’s 22-month stint at the exchange saw him given a $300,000 salary, a signing bonus of $1.4 million, a separate $3 million cash bonus, an 8% equity in FTX US and crypto “worth tens of millions” — all of which FTX is seeking to claw back.
Some parts of the complaint, especially those pertaining to the amounts the whistleblowers were paid, are redacted.
In one alleged March 2022 incident, Friedberg gave an “extraordinary settlement” to a female FTX US employee named “Whistleblower-1” who worked “for less than two months” at the United States-based exchange on a $200,000 salary.
FTX also alleged he initiated a $12 million deal to retain Whistleblower-1’s attorney after the settlement.
The settlement was in response to a demand letter from Whistleblower-1 claiming “Alameda [was] nothing more than an extension of FTX, used to bolster investor confidence in FTX projects, and in turn drive up the prices of projects FTX had developed or invested in itself,” according to the suit.
The former employee also claimed “details regarding company fundraising and various projects were disclosed openly” on Slack which they claimed allowed “all employees present to make trades on the information prior to public announcements.”
Friedberg allegedly contacted the law firm for Whistleblower-1 after the settlement and signed an agreement that saw the firm retained for “more than $200,000 per month for five years,” even though there was “no genuine need” for the services, the suit claimed.
In another alleged instance, Friedberg reportedly fired an attorney working for Alameda dubbed “Whistleblower-2” after they “became concerned about governance and regulatory issues” within the business.
The person worked at Alameda for less than three months, FTX claimed, but they still received a severance package — which was redacted in the filing.
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A June 26 report by FTX restructuring chief John Ray alleged an unnamed senior attorney “facilitated and covered up” the comingling of customer funds.
The same day, The Wall Street Journal reported the unnamed attorney was Daniel Friedberg, citing people familiar with the matter.
Friedberg was also named as a person who gave information to investigators with the U.S. Attorney’s office.
Additionally, a class action lawsuit against celebrities who allegedly promoted FTX also said Friedberg provided evidence that potentially rebuts key defenses made by some of the defendants.
Friedberg could not be immediately contacted for comment.
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Update (June 28, 4:50 am UTC): This article has been updated with further information from the filing.
Cardano’s price has experienced a massive drop recently following the Ethereum crash. However, things are still looking more positive for ADA, compared to ETH.
By Edris Derakhshi (TradingRage)
The USDT Paired Chart
Against USDT, the cryptocurrency has been consolidating between $1.2 and $0.8 over the past few months, forming a large descending channel pattern.
However, it broke down to the downside during the crypto market crash led by Ethereum, and ADA’s price briefly traded below its 200-day moving average, located around the $0.6 mark, before rebounding higher.
Currently, the price is trying to hold above the $0.8 support level, which would be vital if a bullish shift is bound to occur soon.
The BTC Paired Chart
The ADA/BTC chart shows a somewhat similar picture to that of the USDT-paired one. However, ADA is weaker than BTC.
The market has lost a key support level at 900 SAT and is now testing the 200-day moving average, which is located around the 750 SAT level.
In case of a breakdown, a deeper drop toward the 500 SAT area would be imminent. However, as the RSI is showing a clear oversold signal, a pullback toward the 900 SAT level looks more likely at the moment.
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
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Ethereum’s price is yet to recover from the drop it has been experiencing lately. Therefore, more downside could be expected in the coming weeks.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, the price has been making lower highs and lows since getting rejected from the resistance at $4,000. Several support levels have been lost in the last few months, especially the 200-day moving average, located around the $3,000 mark.
While the price has already dropped to the $2,200 support and rebounded, there is still the chance for the market to decline lower as long as the cryptocurrency remains below the 200-day moving average.
The 4-Hour Chart
Looking at the 4-hour timeframe, the price has gradually declined inside a large falling wedge pattern. While the market broke the pattern to the downside on Monday, it recovered, reclaiming the $2,800 level. Yet, the RSI still shows values below 50%, indicating that the momentum is still bearish.
Therefore, if the price does not break back above the $3,000 level soon, a deeper correction or a longer consolidation could be expected in the coming weeks.
Sentiment Analysis
By Edris Derakhshi (TradingRage)
Ethereum Open Interest
As Ethereum’s price is in a steep downtrend, market participants wonder where the price will finally find support. Analyzing the futures market sentiment could provide helpful insights into this situation.
This chart presents the Ethereum funding rates metric, which measures whether the buyers or the sellers are executing their orders aggressively (using market orders) on aggregate. Favourable funding rates indicate bullish sentiment, while negative values show bearish sentiment.
As the chart suggests, the funding rates have dropped significantly following the recent crash. Judging by its current values, it is safe to say that the futures market is no longer overheated. However, without sufficient demand in the spot market, the market will not be able to recover any time soon.
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
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