{"id":1746298,"date":"2022-11-21T06:10:09","date_gmt":"2022-11-21T11:10:09","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1746298"},"modified":"2022-11-21T07:18:46","modified_gmt":"2022-11-21T12:18:46","slug":"ftxs-chief-regulatory-officer-tied-to-online-poker-scandal","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ftxs-chief-regulatory-officer-tied-to-online-poker-scandal\/","title":{"rendered":"FTX\u2019s \u201cChief Regulatory Officer\u201d Tied to Online Poker Scandal"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fftxs-chief-regulatory-officer-tied-to-online-poker-scandal%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1746298&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><aside class=\"single__inline-module alignleft\">\n<\/aside>\n<p>The top \u201cregulatory officer\u201d at fallen crypto exchange FTX once served as an attorney for a company that was embroiled in a notorious online poker cheating scandal more than a decade ago \u2014 and was caught on tape allegedly aiding the perpetrators of the fraud, according to reports.<\/p>\n<p>Dan Friedberg \u2014 a lawyer who was FTX\u2019s chief regulatory officer in the months leading up to its collapse and who also did a stint as its general counsel \u2014 also had served as an attorney for UltimateBet, whose collapse was considered one of the <a href=\"https:\/\/www.nbcnews.com\/id\/wbna26563848\" target=\"_blank\" rel=\"noreferrer noopener\">largest online gambling scandals<\/a> in history at the time.<\/p>\n<p>In the alleged scheme \u2014 which reportedly <a href=\"https:\/\/www.tmz.com\/2013\/05\/11\/ben-affleck-poker-scandal\/\" target=\"_blank\" rel=\"noreferrer noopener\">claimed actor Ben Affleck among its victims<\/a> \u2014 employees between 2005 and 2008 were accused of using a software exploit dubbed \u201cGod mode\u201d to bilk players out of anywhere between $20 million and upwards of $50 million.<\/p>\n<p>The scandal drew coverage from <a href=\"https:\/\/www.cbsnews.com\/news\/how-online-gamblers-unmasked-cheaters\/\" target=\"_blank\" rel=\"noreferrer noopener\">CBS News\u2019 \u201c60 Minutes\u201d<\/a> and spawned a cult documentary called \u201c<a href=\"https:\/\/www.youtube.com\/watch?v=IT2KzfoEJf0\" target=\"_blank\" rel=\"noreferrer noopener\">UltimateBeat<\/a>: Too Much To Lose.\u201d<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-014.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/11\/ftx-014.jpg\" alt=\"FTX\" class=\"wp-image-24712342\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-014.jpg?quality=75&#038;strip=all&#038;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-014.jpg?quality=75&#038;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-014.jpg?quality=75&#038;strip=all&#038;w=512 512w\" \/><\/a><figcaption>FTX filed for bankruptcy last week.<\/figcaption><figcaption><span class=\"credit\">Christopher Sadowski<\/span><\/figcaption><\/figure>\n<p>Friedberg, who reportedly resigned from FTX company earlier this month as it filed for bankruptcy, appears to have since <a href=\"https:\/\/www.linkedin.com\/in\/dan-friedberg-63645253\" target=\"_blank\" rel=\"noreferrer noopener\">scrubbed his LinkedIn account<\/a>, which now displays a message \u201cthis page doesn\u2019t exist\u201d. Online bios for Friedberg said he joined FTX after a stint at the Seattle-based law firm Fenwick &#038; West, where he <a href=\"https:\/\/ipwatchdog.com\/2016\/08\/03\/ryan-straus-dan-friedberg-join-fenwick\/id=71595\/\" target=\"_blank\" rel=\"noreferrer noopener\">chaired the payments systems practice<\/a>. <\/p>\n<p>FTX, meanwhile, has taken down an \u201cabout\u201d page that listed short bios for its top executives, including disgraced ex-CEO Sam Bankman-Fried, FTX co-founder Gary Wang and Friedberg, as well as links to their LinkedIn pages.<\/p>\n<p>The UltimateBet scandal arose after revelations that some of the site\u2019s employees were using the software exploit to peek at online opponents\u2019 cards during hands and bet accordingly.<\/p>\n<p>In 2008, the Kahnawake Gaming Commission, the Canada-based regulatory body that licensed UltimateBet, said it \u201cfound clear and convincing evidence\u201d that Russ Hamilton, a UltimateBet co-owner and consultant, \u201cwas the main person responsible\u201d for the scam, along with a handful of accomplices.<\/p>\n<p>Friedberg\u2019s involvement surfaced after <a href=\"https:\/\/www.youtube.com\/watch?v=XrnmyWu1vS0\" target=\"_blank\" rel=\"noreferrer noopener\">recordings of his conversations with the poker site\u2019s top brass<\/a> was leaked to the public in 2013. The recordings were taken during a meeting in early 2008 between Hamilton, Friedberg and other executives and were reportedly leaked by Travis Makar, Hamilton\u2019s longtime assistant. Friedberg was never personally accused of wrongdoing and there is no indication that he was ever even investigated by prosecutors or regulators.<\/p>\n<p>Friedberg can be heard on tape discussing how UltimateBet should respond and handle media inquiries. Friedberg also advised company executives on a strategy to limit payouts to victims by withholding the extent of the scheme.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-008.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"1024\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/11\/Dan-Friedberg-ftx-008.jpg\" alt=\"Dan Friedberg\" class=\"wp-image-24712321\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-008.jpg?quality=75&#038;strip=all&#038;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-008.jpg?quality=75&#038;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-008.jpg?quality=75&#038;strip=all&#038;w=512 512w\" \/><\/a><figcaption>Dan Friedberg was FTX\u2019s regulatory officer.<\/figcaption><\/figure>\n<p>\u201cI think, for the public, it just has to be, \u2018Former consultant to the company took advantage of a server flaw by hacking into the client, unable to identify exactly when,&#8217;\u201d Friedberg allegedly said on the tape, dictating a script in a bid to shortchange victims of the fraud.<\/p>\n<p>Friedberg even advised Hamilton to claim he also was a victim of the scandal because \u201cotherwise it\u2019s not going to fly.\u201d He acknowledged on tape that the liquidator for Excapsa, the software firm that owned UltimateBet, had $47 million on hand for potential payouts \u2013 but that executives wanted to limit the total to no more than $5 million.<\/p>\n<p>\u201cIf we can get it down to five, I\u2019d be happy,\u201d Friedberg added regarding potential payouts.<\/p>\n<p>At one point in the recording, Hamilton admitted his guilt while directly addressing Friedberg.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-012.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"766\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/11\/Dan-Friedberg-ftx-012.jpg\" alt=\"UltimateBet\" class=\"wp-image-24712336\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-012.jpg?quality=75&#038;strip=all&#038;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-012.jpg?quality=75&#038;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-012.jpg?quality=75&#038;strip=all&#038;w=512 512w\" \/><\/a><figcaption>UltimateBet players were reportedly bilked out of $20 million or more.<\/figcaption><\/figure>\n<p>\u201cI did take this money and I\u2019m not trying to make it right, Dan, so we gotta get that out of the way right away, real quick,\u201d Hamilton said.<\/p>\n<p>The recordings were widely covered by poker media outlets when they first surfaced, <a href=\"https:\/\/www.pokernews.com\/news\/2013\/05\/audio-tapes-expose-ultimate-bet-cheating-scandal-14986.htm\">including Poker News<\/a>, which <a href=\"https:\/\/www.pokernews.com\/news\/2022\/11\/ftx-crash-online-poker-42479.htm\">pointed out the connection<\/a> between FTX, Friedberg and the UltimateBet scandal last week. Poker.org <a href=\"https:\/\/www.poker.org\/ftx-collapse-tether-operations-have-links-to-infamous-online-poker-cheating-scandals\/\">also posted a retrospective<\/a> on Friedberg\u2019s UltimateBet saga \u2014 and speculated about possible parallels with FTX.<\/p>\n<p>\u201cFriedberg would almost certainly have served an important legal and functional role in finding ways to make FTX\u2019s services and structure appear legitimate in the eyes of financial regulators around the globe,\u201d Poker.org\u2019s Haley Hintze <a href=\"https:\/\/www.poker.org\/poker-world-monitors-ftx-collapse-tom-dwan-bemoans-lack-of-disclosure\/\">wrote last week<\/a>.<\/p>\n<p>The Post could not immediately be determine whether Friedberg had any disciplinary action over his involvement with UltimateBet. A Daniel S. Friedberg with expertise in banking and securities is still listed as eligible to practice law on the Washington State Bar Association\u2019s website. <\/p>\n<p>In its 2008 segment, \u201c60 Minutes\u201d reported that \u201cjurisdictional issues\u201d had prevented any criminal charges from being filed against Hamilton or others implicated in the scandal. The audio tapes revealing Friedberg\u2019s involvement did not surface until years after the Kahnawake Gaming Commission released its findings.<\/p>\n<p>Bankman-Fried is alleged to have transferred $10 billion in FTX client funds to help prop up Alameda Research, a cryptocurrency trading house he also owned. At least $1 billion of those funds is still missing.<\/p>\n<p>In a court filing on Thursday, FTX\u2019s new CEO John Ray III, slammed what he described as a complete lack of regulatory guardrails at corporate oversight at the platform under previous leadership \u2013 and declared the situation was worse than what he encountered while steering infamous energy firm Enron through its bankruptcy.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-010.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"660\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/11\/Dan-Friedberg-ftx-010.jpg\" alt=\"UltimateBet\" class=\"wp-image-24712331\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-010.jpg?quality=75&#038;strip=all&#038;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-010.jpg?quality=75&#038;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Dan-Friedberg-ftx-010.jpg?quality=75&#038;strip=all&#038;w=512 512w\" \/><\/a><figcaption>Dan Friedberg advised UltimateBet executives on how to respond to the scandal.<\/figcaption><\/figure>\n<p>\u201cNever in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,\u201d Ray said in the filing.<\/p>\n<p>Friedberg\u2019s past raised alarm bells in the cryptocurrency sector long before FTX\u2019s downfall. In August 2021, cryptocurrency news site CoinGeek noted that FTX\u2019s decision to tap Friedberg as its chief regulatory officer was \u201calmost comically inappropriate\u201d given his past.<\/p>\n<p>CoinGeek\u2019s Steven Stradbrooke noted it \u201cremains something of a mystery\u201d how Friedberg \u201cmanaged to avoid being disbarred\u201d after the recordings surfaced.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-013.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"768\" height=\"1024\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/11\/ftx-013.jpg\" alt=\"Sam Bankman-Fried\" class=\"wp-image-24712338\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-013.jpg?quality=75&#038;strip=all&#038;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-013.jpg?quality=75&#038;strip=all&#038;w=1152 1152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-013.jpg?quality=75&#038;strip=all&#038;w=768 768w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-013.jpg?quality=75&#038;strip=all&#038;w=384 384w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/ftx-013.jpg?quality=75&#038;strip=all 1024w\" \/><\/a><figcaption>Sam Bankman-Fried is the disgraced ex-CEO of FTX.<\/figcaption><figcaption><span class=\"credit\">via REUTERS<\/span><\/figcaption><\/figure>\n<p>\u201cFriedberg\u2019s presence on FTX\u2019s payroll means Sam Bankman-Fried (SBF) either didn\u2019t do his due diligence before hiring, or he knew of Friedberg\u2019s past sins and didn\u2019t care. Neither of these options paints Sam Bankman-Fried in an overly flattering light,\u201d Stradbrooke wrote.<\/p>\n<p>Elsewhere, <a href=\"https:\/\/app.hedgeye.com\/insights\/122943-marc-cohodes-keith-mccullough-hedgeye-investing-summit\">short-seller Marc Cohodes pointed out<\/a> Friedberg\u2019s involvement while predicting FTX\u2019s downfall during a Sept. 3 appearance at the Hedgeye Investing Summit \u2013 a full two months before the platform crumbled.<\/p>\n<p>At the time, Cohodes, who has a reputation for uncovering fraud, argued that FTX was \u201cdirty and rotten to the core.\u201d<\/p>\n<p>\u201cIf you hit up Dan Friedberg\u2019s LinkedIn, there\u2019s no mention of his time at the poker site, there\u2019s no mention of it, yet he\u2019s the chief f\u2014king regulatory officer of FTX, which is a big f\u2014king job,\u201d Cohodes said.<\/p>\n<p>\u201cEither FTX knew they hired a chief regulatory officer who was part of a card-cheating scandal, either they knew that, or he covered it up and got hired,\u201d Cohodes added.<\/p>\n<p>The Post has reached out to Friedberg, Bankman-Fried and FTX for comment.<\/p>\n<p>So far, Friedberg has been quiet about what transpired at FTX despite his presumably large role in the firm\u2019s oversight. A mention of his involvement surfaced in <a href=\"https:\/\/www.wsj.com\/articles\/ftxs-collapse-leaves-employees-sick-with-anger-11668603708?st=x1snxdsafp7ak47\" target=\"_blank\" rel=\"noreferrer noopener\">a recent Wall Street Journal article<\/a>, which quoted a friend who had dinner with Friedberg the day of his resignation.<\/p>\n<p>The source said Friedberg was \u201cvisibly shaken\u201d during the dinner and that the ex-FTX attorney had showed them a text message he purportedly sent to Bankman-Fried, which read, \u201cOne day I hope I can forgive you.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The top \u201cregulatory officer\u201d at fallen crypto exchange FTX once served as an attorney for a company that was embroiled in a notorious online poker cheating scandal more<\/p>\n","protected":false},"author":1,"featured_media":1746301,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[],"class_list":["post-1746298","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1746298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1746298"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1746298\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1746301"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1746298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1746298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1746298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}