Two days before the platform filed for bankruptcy, a former senior FTX executive briefed Bahamian authorities about client fund transfers from the spiral crypto exchange to sister company Alameda Research and pointed to court filings to other FTX leaders, including founder Sam Bankman-Fried. to show.
In documents filed Wednesday, Bahamian authorities allege that during a conference call on Nov. 9, Ryan Salame, then-FTX Digital co-CEO, informed them that client assets that “may have been held” on the exchange were transferred to Alameda to cover financial losses. “in the hedge fund.
Salame warned that so-called transfers are “not allowed or permitted” by customers, and said the only people with access to process unauthorized payments are Bankman-Fried, FTX engineering director Nishad Singh or co-founder Zixiao (Gary). wang.
The disclosures prompted Bahamian authorities to request a police investigation into FTX the same day, given that the transfer of client funds could be a criminal offence.
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Salame’s meeting with Bahamian officials took place while FTX was in freefall. During the three days before the November 9 call, FTX reportedly saw roughly $6 billion in withdrawals at a bank that caused Bankman-Fried to struggle to save his empire. On November 11, FTX filed for bankruptcy.
Bankman-Fried was arrested on several crash-related charges earlier this week and remains in custody in the Bahamas.
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Bankman-Fried, who has donated nearly $40 million to Democratic campaigns and groups during the 2022 election cycle, has been accused of violating campaign finance laws, in addition to several fraud counts.
So far, Sam Bankman-Fried has been the only FTX executive to be blamed for the crypto exchange’s decline that caused customers to lose billions of dollars.
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Salame also made significant political donations during the midterms, but supported the other side of the aisle. The New York Post reports that Salame gave $20 million to Republicans in the last cycle.