FTX Digital Exec Tipped Off Bahamian Authorities About Funds Sent to Alameda

As the crypto world continues to grapple with the fallout from the collapse of FTX, documents obtained by the Wall Street Journal on Wednesday revealed that FTX Digital Chairman Ryan Salame tipped off authorities in the Bahamas about FTX using customer funds to cover losses at Alameda Research.

Christina Rolle, Executive Director of the Securities Commission of The Bahamas, sent a request to investigate, marked urgent, to the Commissioner of the Royal Bahamas Police Force on November 9, 2022, based on the information from Salame. 

Just two days later, FTX filed for Chapter 11 bankruptcy protection. 

Salame had told officials, in Rolle’s summation, that “clients’ assets which may have been held with FTX Digital were transferred to Alameda Research” and that “such transfers were not allowed and therefore may constitute misappropriation, theft, fraud or some other crime.”

Salame also told authorities the only people who were able to transfer client assets to Alameda with the necessary codes or passwords were the CEO Sam Bankman-Fried, director of engineering Nishad Singh, and FTX and Alameda co-founder Gary Wang.

Bankman-Fried was arrested in The Bahamas on Monday and is currently fighting extradition to the United States to face conspiracy, fraud, and money laundering charges. He was denied bail.

Authorities in the Bahamas and the United States have jockeyed for jurisdiction over the FTX case, with U.S. officials and newly installed FTX CEO John Ray accusing Bahamian officials of blocking access to necessary information.

Bahamian regulators, in turn, said Ray’s remarks “do not appear to be concerned with facts but rather appear intended only to make headlines.”