One of the closest lieutenants of the founder of FTX, Sam Bankman-Friedwarned Bahamian regulators about improper trading in the days leading up to the cryptocurrency exchange crash, according to court documents.
The revelation came in documents released as part of a bail hearing for former FTX executive Bankman-Fried. He was arrested on Monday in the Bahamas and was indicted on Tuesday in the United States of alleged fraud, money laundering and conspiracy.
The document cites a warning from both CEO and chairman Ryan Salame FTX Digital Markets, the Bahamian-based arm of Bankman-Fried’s expanding cryptocurrency empire, on transfers to FTX’s cryptocurrency hedge fund Alameda Research.
On Nov. 9, Salame told the Bahamian securities commission that “clients’ assets held with FTX Digital were transferred to Alameda Research to cover financial losses at Alameda,” according to court filings. first published by the Financial Times🇧🇷
In a filing released as part of Bankman-Fried’s bail hearing, commission director Christina Rolle added that Salame made it clear that only three people could make the transfer: Bankman-Fried or its two co-founders, Nishad Singh and Gary Wang. “Such actions can be considered a crime,” concluded Rolle.
The conversation between Rolle and Salame took place two days before FTX Filed for Chapter 11 bankruptcy in the USand Binance, the largest cryptocurrency exchange on the day, walked away from a non-binding offer to secure the company after a brief due diligence.
Salami has long been one of Bankman-Fried’s closest associates, outside of the inner circle of FTX co-founders. While Bankman-Fried used her newfound influence in Washington to gain notoriety as a megadonor to the Democratic Party, Salame did the same with Republicans, eventually giving more than $20 million to various causes. party.
Those donations are now in the spotlight after criminal charges filed against Bankman-Fried in New York cover campaign finance violations and money laundering.
According to the Justice Department’s allegations, client funds invested in FTX were diverted to Alameda, where they were used to make political donations both in the name of Bankman-Fried and in the names of other unnamed “associates.”
Since the collapse of FTX, Bankman-Fried has publicly claimed she was not involved in day-to-day decisions at Alameda, blaming the transfer of money between the two companies on “controlling a secret, poorly labeled internal account. ” contains $8 billion that FTX’s internal records failed to record were actually held in the name of a crypto hedge fund.
But while Bankman-Fried will step down as Alameda’s chief executive in 2021, he will join former hedge fund colleague and onetime girlfriend Caroline Ellison as sole chief executive the following year, civil charges filed by the Commodity Futures Trading Commission allege. that he “retained direct decision-making authority over all major commercial, investment, and financial decisions of Alameda.”
The charges add: “This authority was exercised, at least in part, through Bankman-Fried’s regular, often daily, participation in various personal and mobile conversations with senior Alameda employees.”
