A senior executive from the Bahamian entity FTX alerted local regulators to possible fraud perpetrated on the cryptocurrency exchange just two days before the exchange was forced to shut down.
According to Bahamian court records filed on December 14, Ryan Salame, former co-CEO of FTX Digital Markets (FDM), told the Securities and Exchange Commission of the Bahamas (SCB) on November 9 that FTX was send customer funds to its sister trading firm Alameda Research.
Salame said that the funds were to "cover Alameda's financial losses" and that the transfer "was not allowed or consented to by its clients."
He also told the SCB that only three people had the necessary access to transfer client assets to Alameda: former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao "Gary" Wang, and FTX engineer FTX, Nishad Singh.
The allegation prompted SCB chief executive Christina Rolle to contact the commissioner of the Royal Bahamas Police Force to request an investigation, as the information "may constitute misappropriation, theft, fraud or some other offence."
The next day, November 10, the SCB froze FDM assetssuspended its registration in the country and the Supreme Court of the Bahamas appointed a provisional liquidator to try to preserve the company's assets.
The records reveal the first known case of an FTX or Alameda executive aiding authorities.
Salame is believed to be in Washington DC according to the filed documents and has not spoken publicly since the collapse of the exchange.
his last public cheep It was on November 7th that he replied โlol [sic]to Binance co-founder Yi He, who explained the reason why the exchange sold its FTX token (FTT) holdings.
Related: Realized losses from FTX collapse peaked at $9 billion, well below previous crises
Another former executive from FTX affiliate companies is also believed to have been assisting authorities in recent weeks.
On December 4, speculation abounded after footage allegedly showed Alameda CEO Caroline Ellison, in a New York diner within walking distance of the US Attorney's Office, leading some to believe that she may have been cutting a deal with authorities in the wake of FTX's collapse.
Bankman-Fried is the only person from FTX and Alameda to have been charged so far, adding credibility to speculation that executives from both companies are helping authorities.
The faces charges related to money laundering and political campaign finance violations along with wire and securities fraud.
Bankman-Fried, Wang, Singh and Ellison are reported to have operated a group chat on the Signal encrypted messaging app called "Wirefraud" used to send secret information about FTX and Alameda operations. Bankman-Fried denied any knowledge of or involvement with the group.
Update (Dec 15 5:40am UTC): Added more information from the court filing along with additional background information.
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