Former FTX executives and promotors have come to a nearly $1.36 million settlement with a class action group of the crypto exchange’s former investors seeking compensation for being defrauded.
FTX co-founder Zixiao “Gary” Wang, former engineering lead Nishad Singh and sister trading firm Alameda Research ex-CEO Caroline Ellison agreed to cooperate and give information to the lawsuit to resolve the claims against them, according to a March 27 Miami federal court bid seeking the settlements’ approval.
Settlements were also reached with seven other influencers and former FTX chief regulatory officer and FTX.US chief compliance officer Daniel Friedberg.
The former execs didn’t admit to any of the lawsuit’s allegations, but the class group found the trio’s “knowledge and other information” would be valuable in strengthening its case against others it sued — including celebrities, companies and venture capitalists.
A highlighted excerpt of Ellison’s settlement notes her testimony against former boyfriend Sam Bankman-Fried could help the suit — the FTX MDL (multidistrict litigation). Source: PACER
Wang, Singh and Ellison will turn over — and have already begun sharing — “all non-privileged documents and/or data” they gave when helping prosecutors lock up their old boss Sam Bankman-Fried for 25 years.
The three each face their own sentences after pleading guilty to fraud. The class will affirm their cooperation with the court before their sentencing.
The former execs will also hand in records used in FTX’s bankruptcy case and make themselves available for depositions and hearings.
The settlement agreement further saw the three agree to forfeit their assets for the judge in their criminal case to decide the recovery and distribution of victim funds.
They are not to oppose a request from FTX investors that the funds be distributed through the class suit, as opposed to FTX’s proposed bankruptcy paybacks or other lawsuits.
A settlement with Friedberg was also reached, with the filings noting he has voluntarily “provided valuable information” to the class group and “has agreed to do so on an ongoing basis.”
Related: Sam Bankman-Fried sentenced to 25 years in prison
Friedberg’s settlement notes he “did not have knowledge of the FTX fraud,” and after he found out about it, he “immediately resigned” and “promptly contacted the authorities.”
Seven YouTubers and influencers also paid to settle the suit, including $180,000 from Brian Jung, $122,000 from Kevin Paffrath, $37,485 from Tom Nash, $10,000 from Graham Stephan, and $5,000 each from Jeremy LeFebvre and Andrei Jikh.
Information for American football star William Trevor Lawrence’s settlement wasn’t available, but he seemingly paid $1 million to settle based on the total disclosed relief minus the other agreements’ sums.
All named in the settlements were released “from all claims related to any of the alleged conduct giving rise to this litigation.”
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