A high-ranking executive at FTX's Bahamian unit alerted local regulators to potential fraud at the cryptocurrency exchange just two days before it was forced to shut down.
According to Bahamian court filings filed on Dec. 14, Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), informed the Securities Commission of the Bahamas (SCB) on Nov. 9 that FTX was moving customer funds to its sister trading firm Alameda Research.
The records show the first documented incident of an executive from FTX or Alameda assisting authorities.
Salame told the SCB that only three people had full access to move client assets to Alameda: former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao "Gary" Wang, and FTX engineer Nishad Singh.
Salame said that the transfer was "not allowed or consented to by their clients" and that the money was intended to "cover financial losses of Alameda."
The claim prompted Christina Rolle, executive director of the SCB, to request an investigation from the commissioner of the Royal Bahamas Police Force since the information "may constitute misappropriation, theft, fraud or some other crime."
The SCB froze the company's assets the next day, on Nov. 10, and the Bahamian Supreme Court appointed a provisional liquidator to try to protect the company's assets.
In recent weeks, authorities are also said to have received cooperation from another former official from FTX's associated companies.
On Dec. 4, speculation arose following photos purportedly showing Alameda CEO Caroline Ellison in a New York coffee shop a short walk away from the U.S. Attorney's Office, prompting some to suspect she was striking a deal with authorities in the aftermath of the FTX collapse.
Bankman-Fried is the only person charged from FTX and Alameda thus far, lending validity to the allegation that executives from both companies are cooperating authorities.
He is accused of money laundering, political campaign finance breaches, as well as wire and securities fraud.
According to reports, Bankman-Fried, Wang, Singh, and Ellison ran a group chat on the secure messaging platform Signal named "Wirefraud" where they disseminated confidential information about FTX and Alameda's operations. Bankman-Fried denied at any involvement or knowledge of the group.
It's speculated that Salame is in Washington, D.C. according to the filings, and he hasn't made any public statements since the exchange's collapse.
His last tweet was a "lol [sic]" reply to Binance co-founder Yi He's explanation of why the exchange sold its holdings of the FTX Token (FTT) on Nov. 7.
