FTX employee recruited by Sam Bankman-Fried wants $275,000 bonus

(Bloomberg) — A former Jane Street trader hired by Sam Bankman-Fried to assist with FTX’s charitable giving is fighting to secure the remainder of his 2022 bonus while denying he was responsible for the fallen crypto before the company’s last collapse. Any knowledge of the currency tycoon’s fraud. Year.

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Ross Rheingans-Yoo said in a court filing on Monday that FTX owed him the remainder of his winnings — $275,000 — after the company paid him $375,000 about two months before the cryptocurrency exchange went bankrupt in November 2022. . Rheingans-Yoo has also denied the allegations against him. Earlier this year, new FTX management accused him of aiding and abetting Bankman-Fried’s misconduct while working with the company’s philanthropic arm.

The dispute is tied to a larger effort by FTX’s bankruptcy advisers to recover about $71.5 million in mixed customer and corporate funds, which they claim were led by the exchange’s philanthropic arm, the FTX Foundation, and Rheingans-Yoo It was taken by a non-profit company called Latona Bioscience Group. -Fried, who also worked at Jane Street before launching FTX, was found guilty earlier this month of massive fraud that ultimately led to the cryptocurrency company’s collapse.

Rheingans-Yoo said in a sworn statement: “I was not a member of Bankman-Fried’s inner circle who knew and assisted in the misappropriation of FTX customer funds. I knew nothing about Bankman-Fried’s fraud. I did not aid and abet him. A breach of fiduciary duty to the debtor.”

Rheingans-Yoo said he was recruited by Bankman-Fried in early 2022 to manage a charitable giving affiliate of FTX. The terms of Rheingans-Yoo’s employment were negotiated through a Google document shared with him by Bankman-Fried, which stated that he would serve as an officer of the FTX Foundation, a project member. He said he expected his position, which would have a base salary of $100,000, to involve leading Latona Bioscience, according to court documents.

FTX’s bankruptcy counsel claimed in July that Latona was a “sham” nonprofit company that, along with the FTX Foundation, made investments and donations to life sciences companies “for Bankman-Fried’s personal expansion.” FTX’s new management claimed Latona and the FTX Foundation have received more than $71 million in mixed funding from FTX clients and businesses to invest and donate to life sciences companies.

Reingans-Ryu said his work leading Latona includes researching charities that have a positive impact on society. His attorneys said in court documents that he took his role seriously, and that his duties included meeting with potential recipients of Latona donations and speaking with their founders and executives. He also denied that Latona was a sham organization, It said it was a formally organized not-for-profit company that received capital through an intercompany loan agreement with FTX-related trading firm Alameda Research.

In addition to seeking the remaining cash prize, Rheingans-Yoo is seeking $650,000 from a so-called “foundation steering unit,” which he says will be donated to charity.

The question of whether Rheingans-Yoo is entitled to compensation will be decided by the Delaware bankruptcy judge overseeing FTX’s Chapter 11 case. FTX Advisors said in an Oct. 30 court filing that Rheingans-Yoo’s claim that he was entitled to $275,000 in compensation “has no merit and should be denied.”

FTX declined to comment. The adviser claimed that FTX paid Rheingans-Yoo’s bonus in full because he chose to partially repay it through options on its affiliates before the cryptocurrency company filed for bankruptcy, but Rheingans-Yoo denies this.

The case is FTX Trading Ltd. (Tel: 22-11068) and is heard by the U.S. Bankruptcy Court for the District of Delaware.

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