FTX Group paid $25 million to settle whistleblowers' claims, including market manipulation allegations: examiner's report

Bankrupt cryptocurrency exchange FTX paid over $25 million to six unnamed whistleblowers who found issues with the firm, according to an examiner's report released on Thursday. 

One of those whistleblowers was described as an executive at FTX.US, according to a report filed by examiner Robert Cleary on Thursday. Bankruptcy Judge John Dorsey appointed Cleary, who prosecuted the Unabomber case in the late 1990s, as examiner after an appeals court ruled in January that FTX had to be investigated by an independent examiner. 

The unnamed whistleblower said the FTX Group "misled regulators and investors and lacked adequate corporate structure" and wrote to former CEO Sam Bankman-Fried, former FTX engineer Nishad Singh and former FTX lawyer Dan Friedberg about their concerns. 

"Shortly after, Friedberg told Whistleblower-4 that he should not have written the letter and, in particular, should not have suggested that the FTX Group may not satisfy investor expectations. Friedberg further suggested that Whistleblower-4 apologize to Bankman-Fried," the examiner wrote. 

The whistleblower later resigned in September 2022 and agreed to a settlement worth more than $16 million, according to the report.

Separately, another whistleblower, who alleged market manipulation and insider trading, settled for $1.8 million after working at FTX.US for less than two months with a salary of $200,000. 

Another whistleblower was offered a settlement of $200,000 after alleging market manipulation and "concealment of a relationship." 

The examiner noted that the FTX Group did not have a current or complete list of employees at the time of the bankruptcy filing. 

"Further complicating matters, FTX Group employees resigned informally, including orally and over Signal," the examiner said.

A few former employees resigned before the exchange's collapse, including former FTX.US President Brett Harrison , who resigned in September 2022, and former co-CEO at Alameda Sam Trabucco , who resigned in August 2022.  

FTX collapsed in November 2022 and has since been going through the bankruptcy process and a year later, a jury in New York found Bankman-Fried guilty of all seven criminal counts of defrauding FTX's customers, lenders, and investors. He was later sentenced to 25 years in prison.