Profiles in Corruption: Dan Friedberg and FTX

Before Sam Bankman-Fried needed a criminal lawyer, he needed a *criminal lawyer.*

Probably the most interesting figure in the FTX Crime Family, outside of the core group of insiders and Sam Bankman-Fried’s literal family, is Dan Friedberg. Friedberg was hired on the specific recommendation of Joe Bankman. According to a suit filed against him by the FTX bankruptcy estate, Friedberg had a direct and cheerful role in funneling massive sums of money out of FTX/Alameda and into the hands of executives.

What makes this particularly fascinating is that Friedberg already had a track record of deep involvement with serious fraud. He was a lawyer working for the online, off-shore poker site Ultimate Bet, which in 2008 was discovered to have enabled cheating software, from about 2003-2007, to look at opponents’ hole cards in poker games.

Then, in 2013 – and this is where it gets awesome – a 2008 recording leaked of Dan Friedberg and the culprits in the Ultimate Bet swindle discussing, apparently in great detail, how to evade accountability for their theft and fraud. According to Pokerfuse.com, the tape is three hours long, and features Friedberg and others discussing strategies for covering up long-term cheating at Ultimate Bet, and of plausibly denying refunds to cheated customers.

The tape became public in 2013, meaning that Joe Bankman could not have been unaware of Friedberg’s apparent specialization in covering up fraud when Bankman recommended him for the top spot at FTX. It’s circumstantial, but another significant indicator that everyone involved at FTX, including Bankman-Fried’s parents, were planning a crime from the very beginning.

The other incredibly suspicious thing about Friedberg’s role at FTX/Alameda is that it basically never corresponded with his official title. At the time of FTX’s collapse, he was nominally “Chief Compliance Officer” – w hich, lol, lmao. But Can Sun, who had taken over as FTX’s General Counsel in August of 2021, testified last week that he was still effectively reporting to Friedberg by the time of FTX’s collapse.

Friedberg also held four job titles in two years, while seemingly not materially changing what the debtor suit makes seem like his main job: facilitating the flow of FTX customer deposits through Alameda Research and into the pockets of the FTX Insider group.

Friedberg, it seems, was in practice a kind of meta-lawyer for FTX, Alameda Research, FTX.US, and any number of other entities that amounted to “the FTX Group.”

But “FTX Group” was not a legal entity. In fact, it functionally included entities, particularly Alameda and FTX, that were specifically represented to the public and investors as separate, because their closeness – as it turns out! - enabled serious conflicts of interest. Friedberg clearly had no issue with this, freely mingling the funds of the supposedly unrelated companies.