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FTX Employee Recruited by Sam Bankman-Fried Wants $275,000 Bonus

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(Bloomberg) — A former Jane Street trader recruited by Sam Bankman-Fried to assist in FTX’s charitable giving is fighting to get the rest of his 2022 bonus while denying that he had any knowledge of the fallen crypto mogul’s fraud before the company collapsed last year.

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Ross Rheingans-Yoo said in a Monday court filing that FTX owes him the remainder of his bonus — $275,000 — after the firm paid him $375,000 about two months before the crypto exchange went bankrupt in November 2022. Rheingans-Yoo also denied allegations leveled against him earlier this year by FTX’s new management that he aided and abetted Bankman-Fried’s wrongdoing while working with the firm’s charitable arm.

The dispute is connected to a larger effort by FTX’s bankruptcy advisers to recover roughly $71.5 million in commingled customer and corporate funds they claim were taken by the exchange’s charitable arm, FTX Foundation, and a nonprofit company Rheingans-Yoo led called Latona Bioscience Group. Bankman-Fried, who also worked at Jane Street before launching FTX, was convicted earlier this month of perpetrating a massive fraud which culminated in the crypto firm’s collapse.

“I was not part of Bankman-Fried’s inner circle who knew about and facilitated the misappropriation of FTX customer funds,” Rheingans-Yoo said in a sworn statement. “I had no knowledge of Bankman-Fried’s fraud. I did not aid and abet his breach of fiduciary duty to the Debtors.”

Rheingans-Yoo said he was recruited by Bankman-Fried in early 2022 to oversee a charitable-giving affiliate of FTX. Terms of Rheingans-Yoo’s employment were hashed-out over a Google Doc Bankman-Fried shared with him stating he would serve as program officer of FTX Foundation. He said he anticipated that his role, which came with a $100,000 base salary, would involve leading Latona Bioscience, according to court documents.

FTX’s bankruptcy advisers in July alleged Latona is “sham” non-profit company which, along with FTX Foundation, made investments and donations to life sciences companies “for Bankman-Fried’s personal aggrandizement.” FTX’s new management has claimed that Latona and FTX Foundation took more than $71 million in commingled FTX customer and corporate funds to make investments and donations into life sciences companies.

Rheingans-Yoo said his job leading Latona included researching charities that would have a positive impact on society. His lawyers said in court papers he took his role seriously and that his duties included meeting with potential recipients of Latona’s donations and speaking with their founders and executives. He also denied Latona is a sham organization, saying it was a duly organized nonprofit company that was capitalized through intercompany loan agreements with FTX’s related trading firm, Alameda Research.

Aside from seeking the remainder of his cash bonus, Rheingans-Yoo is seeking $650,000 in so-called “foundation direction units” which he said he would donate 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 advisers said in an October 30 court filing Rheingans-Yoo claim that he’s entitled to the $275,000 award “has no merit and should be denied.”

An FTX spokesman declined to comment. Advisers claim FTX has already fully paid Rheingans-Yoo his bonus because he elected to have the award partially repaid via options in the crypto firm’s corporate affiliates before it filed bankruptcy, which Rheingans-Yoo has denied.

The case is FTX Trading Ltd., 22-11068, in the US Bankruptcy Court for the District of Delaware.

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