FTX’s whistleblowing case was first reported, which is not surprising

Former FTX Digital Markets co-CEO Ryan Salama had reported to the Bahamas Securities Commission (SCB) on November 9 that FTX was moving client funds to its sister trading company, Alameda Research.

Salameh also told the SCB that only three people, former FTX CEO Sam Bankman-Fried “SBF,” FTX co-founder Zixiao “Gary” Wang, and FTX CTO Nishad Singh, have the necessary access to transfer customer funds from the cryptocurrency exchange. to hedge. finance.

These details were shared in records filed in the Bahamas court yesterday (December 14th).

Salame’s allegations prompted Credit Union CEO Christina Rule to request an investigation from the Commissioner of the Royal Bahamas Police Force. The exchange was forced to close after only two days.

Decoding Epic FTX

This is the first reported case of a senior executive at an FTX entity disclosing to a local regulator a possible fraud that occurred on a cryptocurrency exchange.

The Bahamas Police arrested Security Belt forces on Monday (December 12) pending his possible extradition to the United States. The United States Department of Justice charged him with eight felonies, including fraud and conspiracy to commit money laundering.

“As today’s accusations make clear, this was not a case of mismanagement or poor oversight, but of willful fraud, plain and simple,” said US Attorney Damian Williams. Prosecutors called his case “one of the largest financial frauds in American history.”

With a value of $32 billion, FTX was once the third largest cryptocurrency exchange. It has been backed by many such as its blue chip investors such as Sequoia Capital. Customers tried to withdraw their money from the exchange and business crashed in less than a week in early November.

Since only SBF has been charged so far, speculation is rife that several FTX executives may be cooperating with prosecutors.

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