The matters surrounding the FTX implosion are still far from over. Ex-FTX and Alameda Research executives and promoters are in a class action lawsuit with the exchange’s former investors demanding fraud compensation.
In the latest development, the former execs and promotors may face a $1.36 million settlement in the lawsuit.
Former FTX And Alameda Executives To Cooperate With Class Lawsuit
According to a Miami federal court bid on March 27, some former FTX and Alameda executives will share information to aid in resolving the class group’s claims against them. Notably, the bid seeks to get approval for the settlement terms in the class action.
Involved with the suit include FTX co-founder Zixiao ‘Gary’ Wang, ex-lead engineer Nishad Singh and Alameda former CEO Caroline Ellison.
Besides the former executives, the bid included settlements with seven influencers, FTX’s ex-chief regulatory officer, and FTX.US’s head of compliance, Daniel Friedberg.
While the former executives denied all the allegations, the class group maintained that the trio has “knowledge and other information” to support its claims against other defendants. These other defendants include venture capitalists, celebrities, and firms.
Details And Proceedings Of The Settlement
Ellison, Wang, and Singh will provide all non-privileged documents and data they earlier gave the prosecutors for the conviction of Sam Bankman-Fried. They’ve already started sharing such details.
Additionally, the three executives will face their sentences after a guilty plea of being involved in fraud. Also, the class will testify to the court of their cooperation before final sentencing.
The settlement demands the executives relinquish their assets. This creates room for the judge’s decision regarding the recovery and distribution of victim funds.
Also, the settlement expects the executives to support FTX investors’ request to distribute the funds via the class suit. This opposes the exchange’s proposed bankruptcy payback or other lawsuits.
The settlement for Friedberg noted that he voluntarily provided valuable information to the class group and promised to continue doing so for as long as necessary.
Moreover, Friedberg’s settlement revealed he had no prior knowledge of the FTX fraud. However, he immediately resigned from the firm upon knowing and made a timely report to the authorities.
Also, the seven influencers and YouTubers settled the suit as follows: Brian Jung paid $180,000, Kevin Paffrath paid $122,000, Tom Nash paid $37,485, and Graham Stephan paid $10,000, while Andrei Jikh and Jeremy LeFebvre each paid $5,000.
Meanwhile, the settlement details for Trevor Lawrence, an American football star, were unavailable. However, he reportedly paid $1 million based on the cumulative disclosed relief minus certain agreements’ sums.
On Thursday, March 28, US District Judge Lewis Kaplan sentenced FTX co-founder Sam Bankman-Fried to 25 years in prison. Last November, a jury convicted SBF on seven fraud and conspiracy counts.
While the prosecutors angled for a jail term between 40 to 50 years, SBF’s lawyers pushed for less than six and a half years.
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