Dan Friedberg, top right, was chief regulatory officer for FTX and its CEO Sam Bankman-Fried, bottom right. Friedberg also attempted to stiff victims of the UltimateBet poker fraud, according to leaked recordings. (Image: Casino.org)<\/figcaption><\/figure>\nFTX, formerly one of the world\u2019s biggest crypto exchanges, collapsed spectacularly earlier this month. That was after documents leaked to crypto news site CoinDesk<\/em> suggested that the group\u2019s hedge fund, Alameda, was using FTX\u2019s FTT token to make risky loans. The revelation prompted a major sell-off of FTT by Binance, sparking a domino effect.<\/p>\nFTX could not cope with the run on its exchange, because Alameda had traded and lost $8 billion of FTX customer funds.<\/p>\n
Friedberg resigned from FTX earlier this month, just as the shit hit the fan.<\/p>\n
But back in 2008, when bitcoin was still just a fledgling fringe experiment, there was another tale of corporate malfeasance doing the rounds, and Friedberg was involved in that one, too.<\/p>\n
God Mode<\/strong><\/h2>\nThe UltimateBet (UB) cheating scandal was perhaps the darkest chapter in the history of online poker, and it has some contenders.<\/p>\n
It was unearthed by players themselves, who suspected the existence of a so-called \u201cGod-Mode,\u201d or \u201csuper-user\u201d account built into the UB software. This allowed users to play while viewing opponents\u2019 hole cards, they theorized, and they shared their evidence online.<\/p>\n
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In a February 2008 statement, UB confirmed the existence of the account, known as AuditMonster2. The company claimed the cheating had been perpetrated by employees of the former owner, Excapsa Software, and it had deleted the account.<\/strong><\/p>\n<\/div>\nOn September 29, 2008, UB\u2019s regulator, the Kahnawake Gaming Commission, said it had \u201cfound clear and convincing evidence\u201d that Russ Hamilton, a UB shareholder and former World Series of Poker champion, \u201cwas the main person responsible\u201d for the cheating,<\/p>\n
Hamilton and other UB employees had bilked poker players out of an estimated $20 million.<\/p>\n