In order to help with the class action lawsuit against other purported FTX promoters, former Alameda and FTX officials consented to provide information.
A group of former investors in the cryptocurrency exchange FTX who were part of a class action lawsuit seeking compensation for fraud have settled for approximately $1.36 million with former FTX executives and promoters.
FTX co-founder Zixiao “Gary” Wang, former engineering lead Nishad Singh, and sister trading firm Alameda Research ex-CEO Caroline Ellison filed a federal court bid on March 27 in Miami seeking approval of settlements. The settlements seek to resolve the claims against the individuals, and the parties involved have agreed to cooperate and provide information for the lawsuit.
Daniel Friedberg, who had previously served as chief compliance officer for FTX.US and chief regulatory officer for FTX, and seven other influential individuals also agreed to settlements.
Even though the three ex-executives denied all claims made in the complaint, the class action decided that the ex-executives’ “knowledge and other information” would help them win their case against the other defendants, who included celebrities, businesses, and VCs.
The three employees, Wang, Singh, and Ellison, have started disclosing “any non-privileged papers and/or data” that they provided to the prosecutors who helped Sam Bankman-Fried, their former employer, get a 25-year prison sentence.
After entering guilty pleas to fraud, the three individuals will now face sentencing separately. As a last step before the sentence, the class will express their willingness to cooperate with the court.
In addition to appearing for hearings and depositions, the former executives will turn up information used in the bankruptcy lawsuit against FTX.
As part of the settlement, the three defendants agreed to give up all assets so that the judge hearing their criminal case may determine how to divide up victim compensation.
Instead of fighting FTX’s planned bankruptcy paybacks or other litigation, they should support FTX investors’ requests that the money be allocated via the class action.
The settlement also includes Friedberg, who “has consented to do so on an ongoing basis” and has willingly “given vital material” to the class group, as stated in the documents.
According to Friedberg’s settlement, he “did not have knowledge of the FTX scam” and “immediately resigned” after learning about it. He then “promptly alerted the authorities.”
A total of seven YouTubers and influencers contributed to the settlement: Jeremy LeFebvre ($5,000), Tom Nash ($37,485), Kevin Paffrath ($122,000), Graham Stephan ($10,000), and Brian Jung ($180,000).
The settlement amount paid by American football star William Trevor Lawrence was not disclosed; however, it appears that he reached a $1 million agreement based on the sum of the disclosed relief minus the sums of the other agreements.
A release “from any claims connected to any of the alleged conduct giving rise to this lawsuit” was granted to all parties specified in the settlements.
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