FTX ally warned authorities days before Bankman-Fried’s arrest | Sam Bankman Fried

One of the closest associates of the founder of FTX, Sam Bankman FriedRegulators in the Bahamas warned against improper trading on a cryptocurrency exchange in the days leading up to its collapse, according to court filings.

The disclosure came in papers released as part of the bail hearing for Bankman-Fried, the former FTX CEO, who was He was arrested in the Bahamas on Monday And the Charged in the US on Tuesday About alleged fraud, money laundering and conspiracy.

The submission notes a warning from Rayan Salameh, co-CEO and Chairman of the Board FTX Digital Markets, the Bahamas-based part of Bankman Fried’s sprawling cryptocurrency empire, has announced transfers to FTX firm’s crypto hedge fund, Alameda Research.

On Nov. 9, Salameh told the Bahamas Securities Commission that “customer assets that may be held with FTX Digital were transferred to Alameda Research to cover financial losses at Alameda,” according to court documents. First published by the Financial Times.

In the filing, which was released as part of the Bankman-Fried bail hearing, Christina Rule, the committee director, added that Salameh was clear that only three people could have made the transfer: Bankman Fried or its co-founders, Nishad Singh and Gary Wang. Roll concluded that “such acts can be considered criminal.”

The conversation between Rolle and Salame happened two days before FTX He filed for Chapter 11 bankruptcy in the United StatesOn the same day that Binance, the largest cryptocurrency exchange, Stay away from a non-committal offer to save the company After conducting a brief due diligence.

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Salameh has long been one of Bankman-Fried’s closest associates, outside the innermost circle of FTX founders. While Bankman-Fried built his reputation as a huge donor to the Democratic Party, using his newfound clout in Washington, D.C. to push for a friendly regulation, Salameh has been doing the same to the Republicans, eventually giving more than $20 million to various causes within the party.

Those donations are now under the spotlight, after criminal charges were filed against Bankman-Fried in New York, including campaign finance violations and money laundering offenses.

According to DOJ allegations, clients’ money held at FTX was transferred to Alameda, where it was then used to make political donations in Bankman-Fried’s name and the names of other unknown “conspirators.”

Since FTX’s collapse, Bankman-Fried has publicly asserted that it was largely absent from day-to-day decisions at Alameda, blaming the money transfer between the two companies on the oversight of a “hidden and misclassified internal account” containing $8 billion that FTX’s internal records failed to identify. It is actually held in the name of a cryptocurrency hedge fund.

But while Bankman-Fried stepped down as CEO of Alameda in 2021, with his former hedge fund colleague and sometime girlfriend, Caroline Ellison, finally taking over as sole CEO the following year, civil charges filed by the CFTC allege he He “maintained direct decision-making authority over all of Alameda’s major business, investment and financial decisions.”

The charges add: “This power was exercised at least in part by Bankman-Fried’s regular, often day-to-day participation in numerous personal and mobile chat communications with senior staff at Alameda.”

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