FTX ‘Co-CEO’ Warned Bahamas Regulator For Potential Misuse of User Funds 

FTX

The FTX collapse raises thousands of unanswered questions regarding cryptocurrency; some call this a fraud and others call it a scam but what exactly happened is not clear yet.

According to a media outlet, recently, ‘co-CEO’ of FTX Digital Markets Ryan Salame revealed some of the secrets which could be responsible for FTX failure. 

Ryan Salame was among the top lieutenants of FTX co-founder Sam Bankman-Fried. While talking to Bahamian authorities, he revealed that investor and customer funds were used to hide the huge gaps in Alameda Research. 

In an interrogative session with Bahamas Securities Commission’s Executive Director Christina R. Rolle, Salame said that client assets that may have been owned by FTX were moved to Alameda Research to cover losses incurred by the hedge fund.

Rolle wrote in a court filing on November 11,2022, that the transfer of customer assets was “contrary to normal corporate governance and operation at FTX digital.” She also requested the supreme court to seek an emergency intervention for the regulator to seize control of the company’s remaining assets “Put simply, that such transfers were not allowed or consented to by their clients.”   

Ryan’s interaction with regulators also prompted her to alert the Bahamian police requesting an investigation into the company, “on an urgent basis.” The request to police shows that Ryan was in Washington,D.C. on November 9 2022.

Salame told officials that three people had the passwords needed to transfer and they are Sam Bankman, Nishad Singh and Gary Wang.

In a court filing on December 12, 2022 FTX officials involved in the bankruptcy proceedings named Bankman-Fried and Wang as responsible for a separate shift of funds as well as producing new tokens after they filed to start the bankruptcy procedure.

The request by Rolle which was approved by the court was included in a new filing in the bankruptcy case on November 14th, made by Bahamian authorities in response to an argument in the U.S Bankruptcy Court for the District of Delaware suggesting that it is coordinating with SBF.

The attorney representing FTX’s new leadership argued that SBF,Wang and Bahamian authorities including the Securities Commission might have violated bankruptcy rules and regulations.

The Bahamian regulators have vigorously denied coordination with Sam Bankman and filed mandatory documents as evidence in their support. The presiding judge of the case will hear further arguments on December 16 2022 with a detailed hearing on the matter on the scheduled date January 6 2022.  

Source: https://www.thecoinrepublic.com/2022/12/15/ftx-co-ceo-warned-bahamas-regulator-for-potential-misuse-of-user-funds/