FTX co-CEO Ryan Salame tipped off Bahamian regulators on Nov. 9 that the exchange was sending its customers’ funds to Alameda Research, according to a Dec. 14 court filing.
Salame told the Securities Commission of the Bahamas (SCB) that only three people could make such transfers. These people included FTX founder Sam Bankman-Fried, co-founder Zixiao “Gary” Wang, and director of engineering Nishad Singh.
“The Commission understood Mr. Salame as advising that the transfer of clients’ assets in this manner was contrary to the normal corporate governance and operations of FTX Digital. Put simply, that such transfers were not allowed and therefore may constitute misappropriation, theft, fraud or some other crime.”
The financial regulator promptly acted on the information and ordered the freeze of FTX assets on Nov. 10. The watchdog also suspended the exchange’s license and appointed a provisional liquidator to preserve the company’s assets.
According to the filing, Salame is currently in Washington, D.C.