Posted on: November 23, 2022, 06:14h.
Final up to date on: November 23, 2022, 06:14h.
The chief regulatory officer of disgraced crypto change FTX and its one-time normal counsel, Dan Friedberg, has historical past. The Seattle Wash.-based lawyer was a key determine in one in all poker’s most infamous dishonest scandals.
FTX, previously one of many world’s greatest crypto exchanges, collapsed spectacularly earlier this month. That was after paperwork leaked to crypto information web site CoinDesk advised that the group’s hedge fund, Alameda, was utilizing FTX’s FTT token to make dangerous loans. The revelation prompted a significant sell-off of FTT by Binance, sparking a domino impact.
FTX couldn’t deal with the run on its change, as a result of Alameda had traded and misplaced $8 billion of FTX buyer funds.
Friedberg resigned from FTX earlier this month, simply because the shit hit the fan.
However again in 2008, when bitcoin was nonetheless only a fledgling fringe experiment, there was one other story of company malfeasance doing the rounds, and Friedberg as concerned in that one too.
The UltimateBet (UB) dishonest scandal was maybe the darkest chapter within the historical past of on-line poker, and it has some contenders.
It was unearthed by gamers themselves, who suspected the existence of a so-called “God-Mode,” or “super-user” account constructed into the UB software program. This allowed customers to play whereas viewing opponents’ gap playing cards, they theorized, and so they shared their proof on-line.
In a February 2008 assertion, UB confirmed the existence of the account, often known as AuditMonster2. The corporate claimed the dishonest had been perpetrated by workers of the previous proprietor, Excapsa Software program, and it had deleted the account.
On September 29, 2008, UB’s regulator, the Kahnawake Gaming Fee mentioned it had “discovered clear and convincing proof” that Russ Hamilton, a UB shareholder and former World Collection of Poker champion, “was the primary individual accountable” for the dishonest,
Hamilton and different UB workers had bilked poker gamers out of an estimated $20 million.
Caught on Tape
In 2013, audiotapes had been leaked by Hamilton’s longtime assistant, Travis Makar, to the two+2 poker boards. They purportedly recorded Hamilton, Friedberg and different UB execs discussing harm limitation because the scandal broke in early 2008.
“I feel, for the general public, it simply needs to be, ‘former guide to the corporate took benefit of a server flaw by hacking into the shopper, unable to establish precisely when,’” Friedberg allegedly mentioned on the tape, as these current on the assembly mentioned methods to keep away from repaying the total quantity to victims.
Friedberg advised Hamilton ought to declare he was additionally a sufferer of the scandal as a result of “in any other case it’s not going to fly.” Friedberg additionally mentioned he wished to get the 20 million legal responsibility “down to 5.”
“I did take this cash and I’m not attempting to make it proper, Dan, so we gotta get that out of the best way immediately, actual fast,” Hamilton mentioned.
Hamilton and others concerned within the UB scandal escaped prosecution due to jurisdictional points, and Friedberg was by no means disbarred.
Members of its sister web site, Absolute Poker, had been indicted by the US Division of Justice in 2011 on prices of financial institution fraud and cash laundering.