Court filing: FTX Digital Markets co-CEO Ryan Salame told The Bahamas' securities commission on November 9 that customer funds were used to cover Alameda losses

FTX executive told securities regulator crypto exchange was likely funnelling cash to Alameda trading firm

Financial Times 2022-12-15

Context & Ripple Effects

Related reporting had already tied Caroline Ellison, Sam Bankman-Fried and two FTX executives to knowledge of customer lending to Alameda on the same date. This filing adds a contemporaneous disclosure to the Bahamian regulator, rather than an account limited to internal staff.

It also fits reports that FTX's legal and finance teams learned of a bookkeeping back door that could alter records without alerting others. Together, the accounts make the issue one of governance and recordkeeping as well as the transfer of customer assets.

First-order effects

The Bahamian securities commission had Ryan Salame's November 9 account that customer money covered Alameda losses, giving the regulator a direct record of the alleged arrangement.
FTX and Alameda face a more connected factual record alongside Ellison's reported staff disclosure that senior figures knew of customer lending.

Second-order effects

The overlap between regulator-facing and employee-facing accounts increases pressure on FTX's former control functions to explain who knew what and when.
Conflicting or incomplete internal records become more consequential for the parties handling FTX's legal and financial fallout, particularly given the reported bookkeeping back door.

Third-order effects

If similar failures recur across crypto platforms, customer-asset segregation and auditable controls become a central test of exchange credibility rather than a back-office compliance issue.
FTX's collapse illustrates how closely affiliated exchange and trading operations can turn weak governance into a broader legitimacy problem for the sector.

The trend: Crypto platforms are being judged increasingly on whether customer assets, affiliated trading activity and internal records can be independently controlled and verified.

Discussion

@fintechfrank Frank Chaparro on x
Ryan Salame tipped off Bahamian authorities https://twitter.com/...
@tier10k @tier10k on x
Ryan Salame told Bahamian regulators in the days before FTX collapsed that SBF had likely funnelled customer money to his Alameda, according to Bahamian court records https://www.ft.com/... https://twitter.com/...
@kenziesigalos MacKenzie Sigalos on x
Fmr FTX co-CEO Ryan Salame turned on @SBF_FTX two days before bankruptcy, flagging Alameda's use of customer money & telling Bahamas regulators that only 3 people at FTX (SBF, Nishad Singh & Gary Wang) had the power to authorize the moves: https://www.cnbc.com/... w/ @rogoswami
@kadhim @kadhim on x
NEW: As FTX spiralled towards collapse in early Nov, a top executive tipped off Bahamian authorities that Sam Bankman-Fried had transferred customer funds to Alameda, the first confirmed instance of SBF's allies helping investigators w/ @caitlinsgilbert https://www.ft.com/...
@0xsupertrooper @0xsupertrooper on x
Included in this are that Nishad and Gary are the only other two people who would have had the right permissions/passwords to transfer assets https://twitter.com/... https://twitter.com/...
@trengriffin Tren Griffin on x
Again, how is Michael Lewis going to find enough material to write a book? https://www.ft.com/...
@wallstreetsilv Wall Street Silver on x
Sweeeeet Carolineeee 😂 Any other guesses? https://twitter.com/...
@hackermanace Ace on x
Ryan Salame snitched lol Probably to cover his own Salami ass https://twitter.com/...
@nugenmediahub Hussein Faraj on x
We are not worried about Ryan salame. We believe he is already where he should be and we assume if people start speaking about non ftx issues including attacks on other platforms. Ryan might be asked the correct questions and will answer. NISHAD IS crucial.
@teddyschleifer Teddy Schleifer on x
One of the funniest parts of the media circus surrounding the FTX collapse is how the Berkshire Eagle is covering Ryan Salame as its Local Angle. https://www.berkshireeagle.com/ ...
@tree_of_alpha @tree_of_alpha on x
? https://twitter.com/... https://twitter.com/...
@nugenmediahub Hussein Faraj on x
We were hoping that by now, someone would have got to Nishad Singh, it is very crucial he is approached. We will attempt to find him ourselves, although this task will not be easy. If anyone has any access to Nishad, can they please help us find him. He might have the missing
@monasalama_ Mona Salama on x
Former FTX co-CEO, Ryan Salame tipped off Bahamian SEC regulators on Nov. 9 — 2 days before FTX collapsed — that customer funds had been used to “cover financial losses” at Alameda & “such transfers were not allowed & therefore may constitute misappropriation, theft, fraud”
@kadhim @kadhim on x
After speaking to Ryan Salame on November 9, the head of the Bahamas securities commission filed this affidavit to the country's Supreme Court, and alerted the Bahamas police: https://pacer-documents.s3.amazonaws.co m/ ... https://twitter.com/...
@steve_hanke Steve Hanke on x
FLASH: Ryan Salame, co-CEO of FTX's Bahamas operation, SNITCHED on SBF. He told the Bahamian authorities that FTX's customer funds were used to cover losses for Alameda Research, SBF's crypto-trading hedge fund. Thanks to Salame, a CON MAN is behind BARS. https://www.ft.com/...
@ranjanxroy @ranjanxroy on x
Salame was the first flip!!! https://www.ft.com/... https://twitter.com/...
@tradeboicarti16 Tradeboi Carti on x
https://twitter.com/... https://twitter.com/...
@wallstreetsilv Wall Street Silver on x
Ryan Salame, who was co-CEO at FTX, disclosed “possible mishandling of clients' assets” by Sam Bankman-Fried to Bahamian regulators just before FTX's bankruptcy filing. Source: https://www.cnbc.com/...
@adamscochran Adam Cochran on x
@BennettTomlin @danhwang88 1/2 My guess is that it was called that because they likely started using the funds for the first time on arbing the Kimchi premium. Every time they did, you could tell as their lending market maxed out. Those arbs were some of Alameda's only good plays…
@bennetttomlin @bennetttomlin on x
So the $113m Alameda investment in Toss (the Korean based payments provider) has nothing to do with the “weird Korean account” they were using right?
@hoffmang @hoffmang on x
It looks like I was wrong earlier. It turns out that SBF didn't even write the code for the backdoor to his accounting system! 🤣 https://twitter.com/...
@fredwalton216 Fred Walton on x
27) Documentation the form of comments assoc'd w/specific code lines offers clues to origins of mystery account on FTX. It's that account, that a regulator says, helped mask mounting debts of its sister trading firm Alameda Research. https://twitter.com/...
@eking0x Ekin on x
“A GitHub account bearing the name of former FTX executive Nishad Singh authored code that hid Alameda Research's ballooning liabilities on the now-collapsed cryptocurrency exchange, according to internal documentation reviewed by Bloomberg News.”
@carnage4life Dare Obasanjo on x
I remember SBF saying such a backdoor couldn't exist because he didn't know how to code. A reminder that when liars deny, they tend to provide alibis (technical reasons why they couldn't have done it) instead of just saying they didn't do it. https://www.bloomberg.com/...
@eking0x Ekin on x
open-source commingling of funds https://www.bloomberg.com/...
@gilliantan Gillian Tan on x
A GitHub account bearing the name of former FTX top engineer Nishad Singh authored code that hid Alameda's ballooning liabilities on FTX New w/ @antoniabmassa ⬇️ https://www.bloomberg.com/...
@unusual_whales @unusual_whales on x
A GitHub account bearing the name of former FTX executive Nishad Singh authored code that a regulator alleges helped mask mounting debts of its sister trading firm Alameda Research, per Bloomberg.
@thestalwart Joe Weisenthal on x
“Bankman-Fried, who founded Alameda and FTX, called it “our Korean friend's account” and directed it to be created at least partially to mask Alameda's gaping liabilities, the CFTC alleged.” https://twitter.com/...
@jodixu Jodi Xu Klein on x
Sam Bankman-Fried has tried to shift the blame to Alameda, where Caroline Ellison was CEO. Authorities say it was really Bankman-Fried who was running the crypto trading firm. https://www.wsj.com/... via @WSJ
@jeffnolan Jeff Nolan on x
The entire notion that there was an organized corporate structure with controls and chain of command has been obliterated with recent disclosures. He didn't step away from running a criminal enterprise, the only way to preserve the deception is to keep running it https://twitter.…

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