Restaurateur, political donor, whistleblower: the many roles of FTX’s Ryan Salame

In western Massachusetts, Ryan Salame was known as a local boy-turned-hometown hero who struck gold as a top executive at FTX, the now-collapsed cryptocurrency exchange, and used part of ‘this wealth to buy some small restaurants in the area.

In Washington, DC, Mr. Salame was hailed as a “Republican megadonor in the making,” funding candidates and political action committees and establishing FTX’s presence as a crypto heavyweight invested in shaping the nascent industry’s regulation.

Now, Mr. Salame has become a central player in the scandal surrounding FTX after he told regulators in the Bahamas, where the exchange was based, that FTX was misappropriating billions in client funds to prop up a allied crypto trading called Alameda Research.

On Monday, Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas, accused of lying to investors, lenders and customers about the close financial relationship between FTX and Alameda, and of fraudulently using both companies as a “daycare center.” .” Prosecutors said Mr. Bankman-Fried used client funds to trade, buy expensive real estate, invest in other crypto companies, make political contributions and extend personal loans to executives.

Until now, Mr. Bankman-Fried, who is being held without bail in a prison in the Bahamas, is the only FTX executive charged with a crime. But Damian Williams, the U.S. attorney for the Southern District of New York in Manhattan, said the investigation is ongoing and prosecutors have not finished charging people.

Mr. Salame’s activities can be scrutinized, given that he was central to FTX’s political influence operation along with Mr. Bankman-Fried. Mr. Salame, a former co-chief executive of FTX Digital Markets, the company’s subsidiary in the Bahamas, also received a $55 million personal loan from Alameda.

Mr. Salame (pronounced Salem) did not return multiple requests for comment. His attorney, Jason Linder of Mayer Brown, also did not return requests for comment.

Born in Sandisfield, Massachusetts, a town of just 1,000 in the Berkshires, Mr. Salame briefly worked at accounting giant EY. In 2019, he graduated from Georgetown University with a master’s degree in finance before landing a job at Alameda in Hong Kong. He later moved to FTX in the Bahamas, where he was a primary point of contact between the exchange and the local government.

Mr. Salame was not at Mr. Bankman-Fried’s inner circle, however, was fiercely loyal to him, according to people familiar with the matter. Mr. Bankman-Fried and her closest advisers shared an alleged commitment to giving away most of the money they earned under the banner of “effective altruism.”

On the contrary, Mr. Salame sometimes said he was into crypto because it was a way to get rich, according to a person who knows him. He liked expensive cars, flew in private jets and had a reputation for partying hard.

As FTX grew, Mr. Salame began building his profile in Washington as a major Republican donor. During the mid-term elections, Mr. Salame gave $24 million, mostly to Republican candidates and committees, while Mr. Bankman-Fried gave about $40 million, mostly to Democrats. Together, they formed a bipartisan tag team of mega-donors, with fundraisers on both sides of the aisle clamoring for access to a flow of donations that many expected would last for decades.

The contributions were part of an effort by FTX executives to win over supporters from both political parties as they seek to shape US regulation around the cryptocurrency industry.

The campaign’s donation records reveal “a coordinated effort between SBF and Ryan Salame, where they made sure they had every nook and cranny,” said Craig Holman, an official with the ethics watchdog group Public Citizen , lobbying and campaign finance rules. . “It’s much more extensive than you normally see when someone is trying to launder money to officeholders and candidates.”

Mr. Salame split his time between the Bahamas and Washington, where he lived with his girlfriend, Michelle Bond. The pair quickly became a crypto-power couple in the nation’s capital, where Ms. Bond runs a lobby group called the Association for Digital Asset Markets that was backed by FTX. (Mr. Salame once told a colleague that he and Ms. Bond were bonded in part by their shared affection for Mr. Bankman-Fried, according to a person familiar with the interaction.)

Ms. Bond, who did not respond to requests for comment, has a photograph of her and Mr. Salami on top of his Twitter profile. He has the same to yours. This summer, the couple paid about $4 million in cash for a five-bedroom home in Potomac, Maryland, according to property records.

Mr. Salame gave $11,600 to Ms. Bond’s campaign when he ran unsuccessfully for Congress as a Republican this year in Suffolk County, New York, with the support of Donald Trump Jr.. His campaign was also supported by nearly $1.3 million in spending by a super political action committee called Crypto Innovation, which had received most of its cash from another PAC that Mr. Salame helped create and fund along with FTX.

Mr. Salame gave freely to other Republican candidates and the political action committees that supported them. His biggest donations, totaling $15 million, were to a PAC he started this year called American Dream Federal Action, which supported candidates supporting cryptocurrency and pandemic preparedness, a of the pets of Mr. Bankman-Fried.

Mr. Salame once told a fundraiser he helped collect donations from the crypto industry that he wasn’t particularly interested in politics and suggested his donations were encouraged by others at FTX, the fundraiser recalled .

Faced with the avalanche of donations, Mr. Salame was considered a rising star in Washington political circles. An invitation to a cocktail party in Washington last month, just over a week before FTX filed for bankruptcy, greeted Mr. Salame as a “burgeoning Republican megadonor.”

Prosecutors are now investigating campaign contributions linked to FTX. The accusation of Mr. Bankman-Fried accuses the FTX founder of conspiring with others to violate campaign finance laws that prohibit corporate donations to political candidate campaigns and ban donations “on behalf of others,” commonly known as “straw” donations. Authorities said Mr. Bankman-Fried may have used straw donations to allow FTX to make political contributions above federal election law limits. The indictment does not mention Mr. Salame or FTX executives other than Mr. Bankman-Fried by name.

As one of the executives in charge of FTX Digital, the Bahamian subsidiary of the exchange, Mr. Salame was in frequent contact with the country’s securities regulators. In November On the 9th, two days before FTX filed for bankruptcy, Bahamian regulators began investigating possible problems at FTX, according to a public filing. During a phone call with Mr. Salame and other employees of FTX, Mr. Salame told Christina Rolle, executive director of the Bahamas Securities Commission, that FTX Digital’s customer money had been transferred to Alameda “to cover Alameda’s financial losses,” according to the filing.

Back in the Berkshires, Mr. Salame became a household name when he began his restaurant buying spree in Lenox, Massachusetts, a quaint New England town that is a favorite destination for visitors to the rural highlands.

A year ago, The Berkshire Eagle, the region’s local paper, noted that one of Mr. Salame’s first jobs as a teenager were working as a dishwasher in a restaurant near Great Barrington, Massachusetts. Mr. Salame told the newspaper that he bought his first restaurant, Firefly Gastropub, in the summer of 2020, and that he stepped in because the owner wanted to sell the restaurant after the pandemic hurt sales.

A few months later, Mr. Salame approached John McNinch, the owner of the Olde Heritage Tavern, with an offer to buy the restaurant. Founded five decades ago, the restaurant was something of a Lenox institution, with burgers, chicken wings, nachos and chicken potpie on the menu.

Mr. McNinch said he met Mr. Salame when he came to the tavern to celebrate the purchase of the Firefly with the former owner of the restaurant and two others. Mr. McNinch, who bought the Heritage in 2000, said he had no plans to sell it when Mr. Salami arrived.

“I didn’t really know him at all and this deal just came up,” said Mr. McNinch. “I always had a number in my head and he hit it.” Mr. McNinch said he was paid more than $1.5 million and closed the deal in March 2021. The negotiations were conducted largely by email and through a broker, he said.

Other purchases soon followed. Mr. Salame brought them under the Lenox Eats collective, but has largely left them intact, Mr. McNinch said. The website lists five restaurants, including an ice cream parlor and another restaurant on the way.

After the collapse of FTX, Mr. McNinch said, contacted Mr. Salame to see how he was doing, but got no response.

On his Lenox Eats bio page, Mr. Salame said he founded the R Salame Digital Asset Fund in 2021 to provide scholarships to students at two schools he attended in the Berkshires.

His business activities extended beyond FTX and restaurants. In the summer of 2021, he formed a company in Texas called Dogemewn LLC with Ryan Vandervoort, also 29, who lives in another town in the Berkshires. The company’s name appears to be a reference to Dogecoin, one of the many cryptocurrencies that saw their value rise for a while.

The company has been involved in the purchase of several condominiums in Port Isabel, Texas, and South Padre Island, Texas, property records show.

Contacted by phone, Mr. Vandervoort said he did not want to comment on his relationship with Mr. salami

“If you are interested in any information about his business, you should contact him,” said Mr. Vandervoort said.

Emily Flitter provide reports Kirsten Noyes contributed research.

Leave a Reply

Your email address will not be published. Required fields are marked *