ICYMI: What happened with FTX this week

A former lawyer for FTX was accused of being Sam Bankman-Fried’s ‘fixer’

article-image

Artwork by Crystal Le

share

As FTX’s bankruptcy progresses, fresh information has continued to trickle out around the crypto exchange’s balance sheet and the behavior of executives leading up to its collapse.  

The exchange collapsed late last year, a period marked by a slew of bankruptcies from Celsius to Three Arrows Capital. 

The failure of one of the world’s largest exchanges went from bad to worse as then-CEO Sam Bankman-Fried attempted to come up with liquidity as the SEC and CFTC investigated.

John J. Ray III, known for overseeing Enron’s bankruptcy,  was tapped as CEO following FTX filing for bankruptcy. 

This week, Ray released a second report on the state of FTX, and a claims portal could open as soon as July 3. A judge denied Bankman-Fried’s motion to dismiss charges. 

Read more: What an FTX Reboot Could Look Like — And Is It Even Viable?

There are also reports that FTX has explored a relaunch. Here’s what we know. 

Investigation has been ‘extraordinarily challenging’

The newest report uncovered $7 billion of previously unaccounted assets in an arduous process. 

“From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon,” Ray and his team wrote in the June 26 filing. 

Despite uncovering $7 billion, debtors are still $1.7 billion short of nearly $9 billion needed to repay customers. The misuse and commingling of the funds has “complicated” efforts.

FTX created North Dimension to oversee customer deposits. A filing claimed they totaled at least $2 billion by late December 2921 — including approximately $1 billion in customer deposits. 

Executives at FTX made over $100 million in political donations funded through “loans” from FTX. At least $12.7 million donated from an executive, Ray found, came from North Dimension accounts commingled with customer deposits.

Related: Yes, Prosecutors Will Claw Back FTX Money From US Lawmakers

Debtors target ex-attorney for FTX

A June 28 complaint alleged Daniel Friedberg, former chief regulatory officer, committed fraud at FTX and accused him of being a “fixer” for Bankman-Fried. 

The complaint was filed after an unnamed senior attorney was accused of firing another attorney after they noticed “a lack of internal documentation and recordkeeping.” The unnamed attorney in Ray’s report was also accused of false documentation.

There is no direct indication in Ray’s report that the unnamed attorney is Friedberg.

The complaint against Friedberg alleges he “knowingly” failed to ensure proper risk mitigation or compliance. 

“He not only settled the complaints for inflated amounts, in some instances he arranged for the FTX Group to retain the whistleblowers’ attorneys post-settlement, thereby buying or otherwise ensuring their silence,” the filing says.

While at FTX, Friedberg’s resume grew, working his way up into increasingly senior compliance positions that encompassed both FTX and Alameda roles.  

Bankman-Fried was unable to set up a proper bank account for FTX in 2020, but the complaint alleges Friedberg “solved this problem.”

Friedberg also allegedly provided an auditor with a “false, backdated Payment Agent Agreement,” which led to the auditor creating a financial statement for an FTX unit that was provided to potential investors. 

Judge denied Bankman-Fried’s motion to dismiss 

Bankman-Fried’s bid to get certain charges dropped from the US government’s case against him was denied by a judge on Tuesday. He had asked Judge Lewis Kaplan to drop 11 of 13 counts.

Bankman-Fried aimed to dismiss the post-extradition charges and a charge of campaign finance violations because “they allegedly were charged in a manner” that violated the Extradition Treaty between the US and the Bahamas. 

Read more: Drowning in Sam Bankman-Fried: A Survival Guide 

Kaplan said Bankman-Fried’s claims presented “arguments [that were] either moot or without merit.”

Bankman-Fried’s trial is expected to take place in early October. He’s pleaded not guilty.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Silk Road founder Ulbricht made a triumphant return to the Bitcoin Conference, 10 years on from sentencing

article-image

A Blockworks Research report looked at who could take up some of the marketshare in the launchpad space

article-image

Business-to-business stablecoin payments are on the rise, per a report from Artemis, Dragonfly and Castle Island

article-image

Crypto continues to do its thing: incentivizing behavior

article-image

Kraken will soon offer Backed ‘xStocks’ as Solana tokens

article-image

In a unanimous decision, the US Court of International Trade has ruled that Trump’s IEEPA tariffs are unlawful