One of FTX's own executives turned on the company by informing officials about the potential fraud happening within, based on recently unsealed court documents.
According to Gizmodo, on November 9, Ryan Salame allegedly informed Bahamian regulators that client assets were being held at Alameda Research to cover financial losses.
The Allegations Triggered The Islands Police and The Appointment Of Liquidators
In a US court filing on Wednesday, the Bahamas liquidators disclosed Salame's revelations to the Bahamas Securities Commission.
Salame told regulators that only FTX founder Sam Bankman-Fried, co-founder Gary Wang, and former engineering director Nishad Singh had the authority to approve the cash transfers.
He stated that since such transfers were prohibited, they might be considered misappropriation, theft, fraud, or another type of crime.
The 29-year-old FTX executive revealed this during a conference call with the executive director of the Bahamas Securities Commission.
The previously undisclosed interaction between Salame and the Securities Commission of The Bahamas is the first known instance of a top Bankman-Fried ally aiding law enforcement in the investigation.
The New York Post writes that the tip followed a bank run at FTX around the time customers demanded the return of their crypto deposits.
This is what sparked a rush on the part of Bahamian authorities to look into any possible wrongdoing at FTX.
Similar to Bankman-Fried, Salame used his FTX fortune to support numerous candidates for office in the 2022 midterm elections.
Bankman-Fried was named the second-largest donor to Democratic candidates and causes, while Salame gave $20 million to Republican causes.
The FTX executive has not made any public statements since the collapse of the exchange, but it is believed that he is in Washington, D.C., according to The National News.
Read More: FTX's Missing $8 Billion Found in Secret Alameda Research Accounts
Bankman-Fried Has Been Arrested Since
At the request of the United States, Bankman-Fried was detained earlier this week in the Bahamas on eight criminal counts, including conspiracy to commit securities fraud, wire fraud, and money laundering.
However, before that, Bankman-Fried stated that the company would be more than happy to allow withdrawals for all Bahamian customers on FTX and that FTX had separate funds for all Bahamian customers.
The FTX CEO is still the only senior executive who has been charged with any crimes and is being sought in the Bahamas for extradition to the US.
Financial Times reports that Bankman-Fried is accused of conspiring to break US campaign finance laws by giving money to candidates through unidentified co-conspirators.
It is important to note that FTX once had a $32 billion market cap and was backed by illustrious investors like Sequoia Capital.
However, at the beginning of November, the company collapsed in a matter of days as customers tried to withdraw their money from the exchange.
Since then, FTX has been included in Delaware bankruptcy proceedings, along with its US business and Alameda, following Bankman-Fried's transfer of control to restructuring expert John Ray on November 11.
Related Article: FTX Founder Sam Bankman-Fried Gets Fraud Charge, Denied Bail
