A “close associate” of Sam Bankman-Fried has been an informant to the Bahamas’ security commission and may have tipped off the authorities on where he was staying at the time of his arrest. According to the Financial Times, the co-chief of FTX’s Bahamas unit, Ryan Salame, informed the country’s securities commission on November 9 that FTX had moved customer funds to Alameda in order to cover losses. In the information that was obtained from the court records of the Bahamas, Ryan had a conversation with Christina Rolle, the director of the Securities Commission of the Bahamas. On the same day, Rolle communicated the information to the Royal Bahamas Police Force which then arrested SBF.
Salame identified Bankman-Fried and two other FTX executives as potentially being responsible, an allegation that triggered a referral to the Bahamas police and ultimately the appointment of liquidators. The previously unreported contact between Salame and the Securities Commission of The Bahamas is the first known instance of a top associate to Bankman-Fried assisting government authorities to bring down an alleged years-long, massive fraud. -FT
The allegations against Bankman-Fried include participating in a plot to break US campaign finance regulations by funneling known donations totaling $39 million through unnamed co-conspirators throughout the election cycle of 2021-2022. Salame, on the other hand, was a major contributor to Republican causes, handing over $20 million dollars to the Republican midterm candidates. What may be the biggest bipartisan donation from a single company, many are wondering if the donations were a pay-to-play ‘bribe’ – for lack of better terms – citing their mistrust in the system. Even as we broke a story yesterday about 8 social media influencers getting charged by the SEC for a pump-and-dump scheme, most of the comments from you guys echoed something along the lines of: ‘what about the government’? Anyways…
If Salame has been an informant, is it because he’s a good apple, pointing out the bad ones? What should one make of the fact that so far only SBF has been arrested and charged with a crime? There are many who believe that multiple members of his inner circle could be working with the authorities. Caroline Ellison, the former chief executive officer of Alameda Capital, was seen out in public and “not in custody”.
If she was on the other side of the Alameda funds funneling, why wouldn’t she be arrested already? Does she have a deal worked out? The general consensus is that she is working with the SDNY to roll on SBF. Subsequent reports have only reinforced this rumor, and the latest is that Ellison is being represented by DC law firm, WilmerHale. Best known for its Government Affairs Department Chair, Jamie Gorelick, who was the former No. 2 ranking member in the Clinton Justice Department, and in a recent interview, she referred to them as her “wingman.”
On November 10, Bahamian securities regulators applied to place its local operating business, FTX Digital Markets, into provisional liquidation.
After SBF stepped down as CEO and John Ray, a restructuring specialist who cleaned up the Enron mess assumed control of the company. Both it and Alameda were placed into bankruptcy proceedings in the state of Delaware on November 11.
According to the Times, the two rival bankruptcy proceedings have been coming into conflict with one another. Ray’s team has allegedly been arguing that the Bahamians inappropriately transferred FTX assets; however, Bahamian officials have ‘strenuously denied’ these allegations.
SBF is currently detained in the Bahamas and his bail was denied. According to him, he did not do anything wrong intentionally. FTX, which was formerly the third-largest cryptocurrency exchange in the world and had a valuation of $32 billion, suffered a disastrous “bank run” at the beginning of November, during which consumers attempted to withdraw their money from the exchange. FTX of course blocked a lot of those withdraws.