In a significant legal development, a group of former FTX investors, who initiated a class-action lawsuit claiming they were misled and defrauded, have reached a nearly $1.36 million settlement with key figures and promoters associated with the now-defunct cryptocurrency exchange.
The settlement, pending approval by a federal court in Miami as of March 27, involves FTX co-founder Zixiao “Gary” Wang, former engineering lead Nishad Singh, ex-CEO of Alameda Research Caroline Ellison, among others, including seven influencers and Daniel Friedberg, who served as FTX’s chief regulatory officer and FTX.US’s chief compliance officer.
The agreement entails that Wang, Singh, and Ellison will assist the plaintiffs by providing valuable information and documentation that could bolster the lawsuit against other defendants, including notable celebrities, enterprises, and venture capitalists implicated in the case.
Despite not admitting guilt to the allegations, their cooperation was deemed instrumental by the plaintiffs for its potential to reinforce their legal stance.
The trio, already implicated in fraud charges and having started to divulge critical evidence obtained during their tenure at FTX, will continue to share pertinent non-privileged materials and avail themselves for further testimonies and legal proceedings.
This cooperation extends to FTX’s bankruptcy proceedings, with an understanding that they will forfeit their assets for judicial determination regarding the restitution and allocation of funds to the victims.
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The settlements also covered negotiations with Daniel Friedberg, who has been actively contributing information to the plaintiffs and vowed to maintain this support.
Friedberg’s involvement came under a different light as he claimed unawareness of the fraud until its revelation, after which he resigned and reached out to law enforcement authorities.
Additionally, several online influencers settled their part of the lawsuit by agreeing to monetary contributions, with Brian Jung, Kevin Paffrath, Tom Nash, Graham Stephan, Jeremy LeFebvre, and Andrei Jikh collectively contributing over $350,000.
Notably, a significant but undisclosed settlement, inferred to be around $1 million, was attributed to American football star William Trevor Lawrence, based on the cumulative settlement amount minus the known contributions.
The conclusion of these settlements marks a crucial step in addressing the grievances of FTX’s investors, offering them a pathway to recovery while ensuring the implicated parties’ accountability without directly admitting to the alleged misconduct.
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