Two days before FTX was forced to close, Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), informed the Securities Commission of the Bahamas (SCB) of potential fraud at the cryptocurrency exchange.
According to court records filed on Dec. 14, Salame told the SCB that FTX was transferring customer funds to its sister trading firm Alameda Research to cover financial losses, a move that was not allowed or consented to by clients.
Salame said that only former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao “Gary” Wang, and FTX engineer Nishad Singh had the access required to transfer client assets to Alameda.
The SCB’s executive director, Christina Rolle, contacted the commissioner of the Royal Bahamas Police Force to request an investigation based on this information, which “may constitute misappropriation, theft, fraud, or some other crime.”
The next day, the SCB froze FDM’s assets, suspended its registration in the country, and appointed a provisional liquidator to attempt to preserve the company’s assets.
It is believed that Salame is currently in Washington D.C. and has not spoken publicly since the collapse of FTX.
Speculation has also arisen that another former executive from FTX’s affiliated companies has been assisting authorities in recent weeks.
On Dec. 4, pictures circulated purporting to show Alameda CEO Caroline Ellison in a New York coffee shop near the U.S. Attorney’s Office, leading some to speculate that she may be negotiating with authorities following the collapse of FTX.
Bankman-Fried has been the only person from FTX and Alameda to be charged so far, and he faces charges related to money laundering, political campaign finance violations, wire fraud, and securities fraud.
Bankman-Fried, Wang, Singh, and Ellison are said to have operated a group chat on the encrypted messaging app Signal called “Wirefraud” that was used to send secret information about FTX and Alameda’s operations.
Bankman-Fried has denied any knowledge or involvement in the group.