Sam Bankman-Fried, one of FTX’s co-founders, warned Bahamian regulators of improper trading on the cryptocurrency exchange in the days leading up to the crash.
The revelations emerged in papers published as part of the bail hearing for Bankman-Fried, the former CEO of FTX, who was arrested in the Bahamas on Monday and charged in the United States with fraud, money laundering and conspiracy.
The filing refers to transfers from Ryan Salame, co-CEO and chairman of FTX Digital Markets, the Bahamian-based division of Bankman-Fried’s sprawling cryptocurrency empire, to FTX’s crypto hedge fund, Alameda Research.
In the year On November 9, according to court documents first published by the Financial Times, Salameh told the Bahamian Securities Commission that “customer assets held by FTX Digital were transferred to Alameda Research to cover financial losses against Alameda.”
According to Commission Director Cristina Rolle, in a document published as part of the bank’s bailout hearing, it is clear that only three people could have made the transfer: Bankman-Fried or its two founders, Nishad Singh and Gary Wang. “Such actions can be considered criminal,” Rolle concluded.
The conversation between Rolle and Salame came two days before FTX filed for Chapter 11 bankruptcy in the US and the same day Binance, the largest cryptocurrency exchange, walked away from a non-binding offer to bail out the company after a brief due diligence. .
Salame remained one of Bankman-Fried’s closest associates outside the inner circle of the FTX co-founders. While Banman-Fried built a reputation as a mega-donor to the Democratic Party, using his newfound influence in Washington, D.C., to push cronyism rules, Salamee was doing the same with Republicans, eventually giving more than $20 million to various causes in The dance.
Those donations are now in the spotlight after Bankman-Fried was indicted in New York on charges of campaign finance violations and money laundering.
According to the Justice Department’s indictment, client funds deposited with FTX were transferred to Alameda, which was then used to make political donations under both Banman-Fried’s name and other unnamed “co-conspiracies.”
Since the collapse of FTX, Bahnmann-Fried has publicly said that day-to-day decisions at Alameda have not been made, and blamed the transfer of funds between the two companies on “hidden, poorly posted internal accounting controls.” ” containing $8 billion that FTX’s internal records failed to mark as actually held by the crypto hedge fund.
But Banman-Fried “Retains direct decision-making authority over all major business, investment and financial decisions of Alameda”.
“This authority was exercised, at least in part, by Bankman-Fried’s regular and often daily participation in in-person and cellphone chats with senior employees at Alameda,” the lawsuit added.