Ryan Salame, the former co-CEO of FTX Digital Markets told the Securities Commission of the Bahamas on Nov. 9 that FTX was sending customer funds to its sister trading firm Alameda Research.
Salame said the funds were to cover financial losses of Alameda and the transfer was not allowed or consented to by their clients.
He also told the SCB only three people had the access required to transfer client assets to Alameda: Former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao Wang and FTX engineer Nishad Singh.
The allegation spurred SCB executive director 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 crime.
The next day, on Nov. 10, the SCB froze FDM’s assets, suspended its registration in the country and the Bahamian Supreme Court appointed a provisional liquidator attempting to preserve the company’s assets.
Bankman-Fried is the only person from FTX and Alameda to have been charged so far, adding credence to the speculation that executives from both firms are assisting authorities. He faces charges related to money laundering and political campaign finance violations along with wire and securities fraud.
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