Court filing reveals FTX co-CEO Ryan Salame blew the whistle

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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.

Mean­while, SBF has been arrest­ed by the Bahamas author­i­ties at the behest of the US gov­ern­ment. He was denied bail because he is con­sid­ered to be a flight risk.

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