Ultimate Bet Scandal Lawyer Daniel Friedberg at Centre of FTX Crypto Crash

November 11, 2022
Andrew Burnett

The poker world was shocked to learn that one of the main players in the FTX crypto crash is none other than Daniel Friedberg, the attorney who was in it up to his neck in the Ultimate Bet and Absolute Poker scandals of the late noughties.

The FTX Disaster

The news broke this week as FTX, once the second-biggest cryptocurrency exchange in the world, halted withdrawals as investors pulled $6billion in deposits.

This ‘run on the bank’ followed rumours and allegations that the Bahamas-based company was basically insolvent, its FTT currency tanking by up to 80% in one day.

Further news that a proposed Binance buyout of FTX was off the cards almost certainly means the end for FTX.

Binance CEO Changpeng “CZ” Zhao tweeted: “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.”

The UB/AP poker link

Back to the links to poker and it transpires that FTX’s former general counsel and current chief compliance officer is none other than Daniel Friedberg, who was involved in the Ultimate bet scandal and subsequent cover-up.

Friedberg was one of the Ultimate Bet lawyers present at a secretly-recorded meeting in which Ultimate Bet boss Russ Hamilton admitted to cheating and stealing players’ money.

Some $50million was robbed from other players in the super-user scandal, with Hamilton having “God-mode” access to everyone’s hole cards.

The audio recording, which surfaced in 2013 – five years after the meeting – reveals Friedberg actively conspiring to lie about what had actually happened.

Thieves and Liars

Hamilton is heard on tape telling Friedberg: “I did take this money and I’m not trying to make it right, Dan, so we gotta get that out of the way right away, real quick.”

Friedberg advises Hamilton to not only claim he was also a victim of the cheating – “otherwise it [the concocted cover-up tale] is not going to fly” – but also to put out a story that “a former consultant to the company, uh, took advantage of a server flaw by hacking into the client.”

The people at the meeting – Hamilton, Friedberg, Ultimate Bet founder and CEO Greg Pierson, and Friedberg’s fellow UB attorney Sanford Millar – also discussed how much it was going to cost them to repay players and regulatory fines.
“If we could get it down to five, I’d be happy,” says Friedberg, advising his fellow cover-up members that it was a realistic figure “depending how creative we get.”

Poker pro and former November Niner, Cliff Josephy had spotted the Friedberg link several months ago, though few picked up on it until FTX’s blow-up this week...

...with veteran, award-winning journalist Haley Hintze, who reported extensively on the UB/AP scandals back in the day, summing up the news that Friedberg was involved with the recent FTX debacle.

The Ultimate Bet scandal is one of the darkest in poker’s history, and it is unlikely to ever fully go away. Earlier this year we reported on Jungleman Dan Cates calling out Phil Hellmuth for his involvement...

There will undoubtedly be more to come on this breaking FTX/Friedberg story and we’ll keep you in the loop right here, so be sure to check in regularly!

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