The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An FTX executive breached Bahamian Immigration regulations by working outside the scope of his work permit, court documents have revealed.

John Ray, head of the 134 FTX entities in Chapter 11 bankruptcy protection in Delaware, produced evidence in legal filings this Monday that Ross Rheingans-Yoo had obtained a Bahamian work permit to act as a trader for Alameda Research (Bahamas).

The latter was the Bahamian affiliate of the private hedge fund/trading arm set up by FTX founder, Sam Bankman-Fried. Yet Mr Ray is alleging that, in reality, Mr Rheingans-Yoo was working for “a sham Bahamian non-profit” created by Sam Bankman-Fried, the crypto exchange’s embattled founder, to help channel $71.55m in purported charitable donations to life sciences companies.

These allegations, if accurate, would mean Mr Rheingans-Yoo was working outside the scope of his work permit. Keith Bell, former minister of labour and Immigration, previously warned that such breaches will result in work permits being revoked if detected.

The approval for Mr Rheingans-Yoo’s work permit, dated April 30, 2022, and signed by Keturah Ferguson, the then-Immigration director, confirmed that it was valid for a year and stipulated he would be acting as a “trader” for Alameda Research (Bahamas). The approval was addressed to Clement Maynard III at Clement T. Maynard & Company, the Bahamian law firm then representing FTX’s interests locally,

The purported violations of Bahamian Immigration law and regulations emerged as the Prime Minister’s Office finally confirmed that Philip Davis KC’s son, Christopher, did meet with Mr Bankman-Fried to discuss the possible use of non-fungible tokens (NFTs) - a form of digital assets - in helping to generate revenue for Junkanoo artists, straw vendors and others whose works could be sold online.

“Christopher Davis, the son of the Prime Minister, an author and researcher on the history of slavery in The Bahamas, is the founder of a non-profit organisation called Sankofa Flamingo, which strengthens Bahamian ties to historical roots in Africa and promotes Junkanoo in Africa,” the Prime Minister’s Office said in a statement.

“In the fall of 2022, Sankofa Flamingo was exploring ways to use NFTs, or non-fungible tokens, to benefit Junkanoo artists, straw vendors and others whose artistry would be represented in digital form and traded online.”

Pointing out that, at that time, “FTX was one of the most prominent exchanges for the trade of digital assets”, the statement added: “NFTs were thought to hold great promise for providing artists with a new revenue stream to support their work.

“Christopher Davis and a fellow non-profit colleague had a single meeting with Mr Bankman-Fried to learn more about NFTs. Neither Christopher nor his non-profit received any funding as a result of the meeting.”

The statement was issued in response to reports some two weeks ago that Mr Davis asked Mr Bankman-Fried to provide advice to his son about a digital assets project the latter was working on just two months before FTX collapsed.

The disclosure came during the FTX founder’s ongoing New York trial over the misappropriation of billions of dollars in client funds, when prosecutors asked an investigating FBI agent to clarify why Mr Bankman-Fried is facing wire fraud charges.

Danielle Kudla, from the US attorney’s office for southern New York, produced a September 2022 email purportedly sent by Philip Davis KC to the FTX founder as confirmation of the latter’s phone number. The message, sent from a gmail address and allegedly containing Mr Davis’ contact information, saw Mr Bankman-Fried send his own phone number in reply.

The Coindesk website, which is covering the latter’s trial, reported that Mr Davis in the e-mail asked Mr Bankman-Fried if his son could call the FTX chief to talk and seek advice about a non-fungible token (NFT) project he was working on. NFTs are a form of digital assets. Mr Bankman-Fried allegedly seemed agreeable, and said he would be available to the Prime Minister’s son via Zoom or phone.

The Prime Minister’s Office elected not to comment at the time when approached by Tribune Business about these allegations, and only seems to have responded now after further claims of dealings between Mr Davis and Mr Bankman-Fried surfaced during the latter’s latest testimony in his trial before the New York federal courts on multiple fraud and money laundering counts.

Meanwhile, Mr Ray’ legal filings detailing the work permit breaches, alleged: “On April 11, 2022, Rheingans-Yoo executed an employment agreement with Alameda Bahamas, a wholly-owned subsidiary of Alameda. The employment agreement was dated April 11, 2022, and applied retroactively starting on March 1, 2022.”

The dates suggest that Mr Rheingans-Yoo’s work permit was approved within 19 days of the employment contract being signed, given that Ms Ferguson’s letter was dated April 30, 2022. “The employment agreement provided that Rheingans-Yoo would be employed by Alameda Bahamas as a ‘trader and investment associate’ and that he would report to Caroline Ellison,” Mr Ray continued.

“Rheingans-Yoo’s work visa in The Bahamas was predicated solely on his employment as a trader for Alameda Bahamas. However, notwithstanding the terms of the employment agreement or his work visa, there is no evidence that Rheingans-Yoo ever performed any trading work or investment services for Alameda Bahamas.

“The employment agreement provided that Rheingans-Yoo would receive a salary of $100,000 per year to be paid by Alameda Bahamas.” Bonuses were also part of the deal, but Mr Ray alleged: “In actuality, however, Rheingans-Yoo worked as the executive director of Latona, a sham Bahamian non-profit entity that Bankman-Fried and Rheingans-Yoo used to invest in life sciences companies.

“His salary and bonus were paid by FTX Digital Markets, not by Alameda Bahamas.” The former is FTX’s Bahamian subsidiary, which means that Mr Rheingans-Yoo’s case may belong in the Bahamian liquidation rather than the Chapter 11 proceedings.

Mr Ray’s action seeks to dismiss Mr Rheingans-Yoo’s near-$1m claim against Alameda Research (Bahamas) for unpaid salaries and bonuses. He was awarded a $330,000 bonus for the 2022 first half, but was paid $375,000 in cash - $50,000 more than what he was supposed to receive via this payment form - from FTX Digital Markets, the Bahamian entity.