According to a recent Bloomberg report, FTX Trading Ltd., the bankrupt cryptocurrency exchange, is suing its former top compliance officer, Daniel Friedberg, accusing him of enabling the misuse of billions of dollars of customer funds by company founder and alleged fraudster Sam Bankman-Fried. 

The lawsuit, which was filed in US Bankruptcy Court in Wilmington, alleges that Friedberg helped facilitate the routing of billions of dollars in purported profits of the FTX Group to the FTX Insiders, their families, friends, and acquaintances through personal loans, bonuses, investments, real estate purchases, charitable and political contributions, and other means of transfer.

FTX’s latest lawsuit is part of a broader effort by the company to recover funds that can repay creditors, including customers whose cryptocurrency was held on the exchange before it collapsed in November. 

The company’s new CEO, John Ray, and his advisers are attempting to recover money that was wrongly transferred from customer accounts. The bankruptcy rules allow the company to recover payments made before the firm filed Chapter 11.

FTX’s complaint is the latest in a series of lawsuits filed by the company to recover allegedly misused customer funds. In a report released last week, FTX managers said a senior attorney facilitated the transfer of customer funds, although no name was mentioned.

Bankman-Fried is awaiting trial on criminal charges related to FTX’s collapse. Friedberg has not yet commented on the lawsuit.

Bankrupt cryptocurrency exchange FTX is trying to restart its international exchange, according to a report from the Wall Street Journal citing CEO John Ray. 

The company has begun soliciting interested parties to participate in the reboot of the FTX.com exchange, Ray said. The company is reportedly in talks with investors about backing the potential restart of the exchange through structures such as a joint venture.

The defunct crypto exchange filed for Chapter 11 bankruptcy protection in the United States in November 2021 following its collapse, which sent shockwaves through the digital assets industry. Crypto exchange customers withdrew billions of dollars in the days leading up to the failure, severely impacting the firm’s liquidity. 

As FTX seeks to restart its international exchange, it will face significant challenges. The company’s bankruptcy proceedings and lawsuits could impact investor confidence, while the highly competitive cryptocurrency industry could make it difficult for the company to regain market share. 

Nonetheless, FTX’s reputation and track record suggest that the company has the potential to succeed in this endeavor, provided it can execute its plans effectively and differentiate itself from its competitors.

Featured image from Unsplash, chart from TradingView.com 

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