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Quick Take
- A key FTX official communicated with the Bahamas SC boss about the ongoing illegalities before the firm’s collapse.
- SBF and two others made moves that contravened governance rules.
The gamut of woes rocking the once-blossoming FTX continues as more revelations pour in. In a November 2022 disclosure by Ryan Salame, the co-director of the firm’s Digital Markets, she informed the Chief Executive Officer of the Bahamas Securities Commission (SC), Christina Rolle that investors’ contributions were channeled into the coffers of Alameda Research, Sam Bankman-Fried’s private cryptocurrency outfit to revamp it.
By not getting approval from them before beginning such an effort, this move violates FTX corporate governance norms and demonstrates the amount of impunity with which principal officials of the firm treated their clients. The crime may be better understood between the trio of Sam Bankman-Fried, Nishad Singh, and Gary Wang because they had exclusive access to the transfer of those monies and the creation of tokens, actions that were carried out concurrently with their filing for insolvency.
This closely resembles the viewpoint of John J. Ray III, the new CEO of FTX. He believes that the total concentration of the activities of the company in the hands of largely inexperienced and primitive individuals brought about its downfall, hinting at the fact that the firm lacked a standard book-keeping procedure for its mega trading business and instead resorted to the use of QuickBooks for that purpose.
The last-minute pullback by Binance from a potential deal to integrate the struggling crypto exchange into its fold may have been what revealed the shenanigans around FTX.
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