Former executives and promoters of crypto exchange FTX have settled with a group representing former investors of the exchange in a lawsuit. According to the details of the settlement, the former executives and promoters of the exchange will part with $1.3 million. The settlement stems from a protracted lawsuit where investors were seeking compensation, by claiming that they were defrauded.
Former FTX affiliates settle class-action lawsuits
The parties involved in the lawsuit include FTX co-founder Zixiao ‘Gary’ Wang, sister company Alameda Research ex-CEO Caroline Ellison, and former engineering lead Nishad Singh. The aforementioned individuals have also agreed to provide information that will aid the lawsuit in a bid to resolve the claims against them. The settlement agreement, which was filed in a Miami federal court, is seeking approval of the settlement.
The settlement also includes seven influencers and Faniel Friedberg, the former chief regulatory officer of FTX who also doubles as the chief compliance officer of FTX.US. Although the executives charged in the lawsuit did not agree to any of the allegations, the class group said their cooperation was of immense value. The group mentioned that it would strengthen its case against other affiliates involved in the lawsuit.
As part of the terms agreed on during the settlement, the former executives will share all non-sensitive documents that they provided during the trial of their ousted former boss Sam Bankman-Fried. The disgraced former CEO of FTX received a lengthy 25-year sentence for fraud as the other three executives await their fates after pleading guilty to their fraud charges.
Terms of the settlement agreement
The executives involved in the settlement will also be available for hearings and depositions and have agreed to forfeit their assets, allowing the judge in charge of their criminal proceedings to determine the method of recovery and distribution of victims’ funds. Also, they have been barred from contesting a request from FTX investors on how the funds will be distributed.
Daniel Friedberg, in his settlement, acknowledged his voluntary decision to provide valuable information to the class group and his willingness to continue to provide such information. The settlement with the former executive notes that he had no prior knowledge about the fraud carried out by FTX. Upon discovering the fraud, he contacted the authorities and sent in his resignation letter. He has also demonstrated immense cooperation with the ongoing investigations.
The seven YouTubers and influencers involved also contributed a portion to the settlement. Brain Jung paid $180,000, Levin Paffrath paid $122,000, Tom Nash paid $37,485, Graham Stephan paid $10,000 while Jeremy LeFebvre and Adrei Jikh paid $5,000 each. However, details involving the settlement of American football star Trevor Lawrence were not shared, but he likely paid $1 million based on the disclosed relief, minus other sums in the agreement.
