A top executive of FTX’s Bahamas subsidiary warned that country’s securities authority days before the company filed for bankruptcy Nov. 11 of customer fund transfers to Alameda Research, a cryptocurrency trading firm tied to FTX, according to documents made public Wednesday. The warning prompted the regulator to immediately seek a criminal investigation, according to the documents, WSJ Pro Bankruptcy reported. Securities Commission Executive Director Christina Rolle requested that the financial crimes unit of the Royal Bahamas Police Force open an investigation into the subsidiary, FTX Digital Markets Ltd., the same day based on the warning of FTX Digital Chairman Ryan Salame. “Regrettably, the commission was informed today by [Mr. Salame]…that clients’ assets which may have been held with FTX Digital were transferred to Alameda Research,” Ms. Rolle wrote to the police commissioner. “The commission understood Mr. Salame as advising that the transfer of clients’ assets in this manner was contrary to the normal corporate governance and operations of FTX Digital,” Ms. Rolle wrote, and that “such transfers were not allowed and therefore may constitute misappropriation, theft, fraud or some other crime.”
