According to court documents, a senior executive of the FTX group of firms, who is also Sam Bank-Fried’s close friend, informed Bahamas police that money was commingled between the cryptocurrency exchange and its sister trading company Alameda Research as early as November 9.
According to a letter to the Bahamas Police Commissioner made public this week, Ryan Salame, the co-chief executive of FTX’s Bahamas entity known as FTX Digital Markets, informed the Bahamas Securities Commission on November 9 that “clients” assets held with FTX Digital were transferred to Alameda Research.
According to the Executive Director of the Bahamas Securities Commission, Christina Rolle, this act – the comingling of funds would be considered “misappropriation, theft, fraud, or any other crime.”
Salame further revealed that only three people—former CEO Sam Bankman-Fried, Nishad Singh, and Gary Wang— have the authority to transfer the money. The Financial Times first reported on the contents of the documents.
A major problem in the FTX story is the commingling of funds across Bankman-enterprises. The company’s former and currently detained CEO, Bankman-Fried, has claimed that he did not “knowingly commingle funds.” The U.S. The Securities and Exchange Commission has also accused Bankman-Fried of creating a special line of credit that gives Alameda Research access to FTX customer funds.
According to emails included in the court documents, this discovery led Christina Rolle, the executive director, to urgently request an investigation from the local police commissioner.
The court documents further revealed that SBF corresponded through email with several key Bahamian officials during that crucial time before bankruptcy, including Rolle and Attorney General Ryan Pinder.
On the evening of November 9, SBF sent Pinder an email in which she apologized for her “delayed responses” to the emails sent earlier. In that email, he wrote: “it’s been a hectic week, but that’s on me. Myself, and Joe (cc’ed), will be responsive going forward.” Included in the line of the email of Joseph Bankman, SBF’s father, who was also cc’ed.
In that email, SBF disclosed that FTX had “segregated funds for all Bahamian customers.” He again added that “we would be more than happy to open up withdrawals for all Bahamian customers on FTX so that they can, tomorrow, fully withdraw all of their assets, making them fully whole.” This, unfortunately, turned out to be false hopes as none of FTX’s customers have been able to withdraw their funds.
SBF is still the only senior executive of FTX who has been charged with a crime and could face being extradited from the Bahamas to the US.
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