Since its shock bankruptcy last month, the true extent of the commingling of funds between FTX and Alameda Research has become painfully clear.
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A senior executive within FTX tipped off the Bahamian authorities about customer funds being used to cover losses at Alameda Research.
Ryan Salame, the chairman of FTX Digital, sent information to the Securities Commission of The Bahamas — two days before the doomed exchange filed for bankruptcy.
He had warned that the transfers to Alameda "may constitute misappropriation, theft, fraud or some other crime."
Salame went on to claim that Sam Bankman-Fried — as well as director of engineering Nishad Singh and FTX co-founder Gary Wang — were the only people with authorization to make such transfers.
Since its shock bankruptcy last month, the true extent of the commingling of funds between FTX and Alameda Research has become painfully clear.
Prosecutors now believe that more than $8 billion in customer assets was deposited into Alameda-controlled accounts — and these funds were used as a "personal piggy bank" to buy luxury property, back political campaigns and make private investments.
Bankman-Fried is now facing eight criminal charges in the U.S., as well as civil enforcement action from the SEC and CFTC.
He has been denied bail and is being held in a Bahamian prison, with an extradition hearing set to take place in February.
