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

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

Restaurateur, political donor, tipster: the many roles of FTX's Ryan Salame

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

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In Washington, D.C., Mr. Salame has been hailed as a “budding Republican megadonor,” funding candidates and political action committees, and establishing FTX’s presence as a crypto heavyweight invested in shaping infant industry 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 embezzling billions of client funds to support an allied crypto trading firm called Alameda Research.

Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas on Monday, accused of lying to investors, lenders and clients about the close financial dealings between FTX and Alameda, and committing fraud. using the two companies as a “piggy bank”. .” Prosecutors said Mr. Bankman-Fried used client funds to trade, buy expensive real estate, invest in other crypto companies, make political contributions and provide personal loans to executives.

So far, Mr. Bankman-Fried, who is being held without bail in a Bahamian jail, is the only FTX executive charged with wrongdoing. But Damian Williams, the U.S. attorney for the Southern District of New York in Manhattan, said the investigation was continuing and prosecutors were not finished charging individuals.

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

Mr. Salame (pronounced Salem) did not return several 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 people 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 with Alameda in Hong Kong. He then moved to FTX in the Bahamas, where he was the main point of contact between the exchange and the local government.

Mr. Salame was not part of Mr. Bankman-Fried’s inner circle, but he was fiercely loyal to him, according to people familiar with the matter. Mr Bankman-Fried and his closest advisers all shared an alleged commitment to donating most of the money they earned under the banner of “effective altruism”.

In contrast, Mr. Salame has said at times that he was in crypto because it was a way to get rich, according to a person who knows him. He loved expensive cars, flew private jets and had a reputation for partying.

As FTX grew, Mr. Salame began to gain recognition in Washington as a major Republican donor. In the midterm 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 team of megadonors, with fundraisers on both sides of the aisle clamoring for access to a stream of donations many expected to last for decades.

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

Campaign donation records reveal “a coordinated effort between SBF and Ryan Salame, where they make sure to have every corner hidden,” said Craig Holman, an official with the watchdog group Public Citizen which focuses on the campaign. ethics, lobbying and campaign finance rules. . “It’s much more extensive than what you usually see when someone tries to launder money from office holders and candidates.”

Mr. Salame divided his time between the Bahamas and Washington, where he lived with his girlfriend, Michelle Bond. The pair have quickly become something of a crypto power couple in the nation’s capital, where Ms. Bond leads a lobby group called the Association for Digital Assets Markets, 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 photo of herself and Mr Salame at the top of his Twitter profile. He has the the same on his. This summer, the couple paid about $4 million in cash for a five-bedroom home in Potomac, Maryland, property records show.

Mr. Salame donated $11,600 to Ms. Bond’s campaign when she unsuccessfully ran for Congress as a Republican this year in Suffolk County, NY, with the backing of Donald Trump Jr.. His campaign was also backed by nearly $1.3 million in spending by a super political action committee called Crypto Innovation, which had received most of its money from another PAC Mr. Salame helped set up. create and fund with FTX.

Mr. Salame has donated freely to other Republican candidates and the political action committees that have supported them. His biggest donations — totaling $15 million — went to a PAC he launched this year called American Dream Federal Action, which backed pro-cryptocurrency and pandemic preparedness candidates, a cause favorite of Mr. Bankman-Fried.

Mr. Salame once told a campaign fundraiser who helped raise donations from the crypto industry that he was not particularly interested in politics and suggested that his donations were encouraged by d others at FTX, the fundraiser recalled.

Given the flood 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 – hailed Mr. Salame as a “budding Republican megadonor”.

Prosecutors are now reviewing FTX-related campaign contributions. Mr. Bankman-Fried’s indictment accuses the FTX founder of conspiring with others to violate campaign finance laws that prohibit corporate donations to political candidates’ campaigns and prohibit donations” on behalf of other people” – commonly referred to as “straw donations”. . Authorities said Mr. Bankman-Fried may have used straw donations to allow FTX to make political contributions beyond the limits of federal election law. 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 exchange’s Bahamian subsidiary, Mr. Salame was in frequent contact with the country’s securities regulators. On Nov. 9, two days before FTX filed for bankruptcy, Bahamian regulators began investigating FTX’s potential problems, according to a public filing. In a phone call with Mr. Salame and other FTX employees, Mr. Salame told Bahamian Securities Commission executive director Christina Rolle that money from FTX Digital customers had been transferred to Alameda. “to cover Alameda’s financial losses”. depending on the file.

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

A year ago, The Berkshire Eagle, the area’s local newspaper, noted that one of Mr Salame’s first jobs as a teenager was working as a dishwasher at a restaurant in nearby Great Barrington, Mass. Mr Salame told the newspaper he bought his first restaurant, the Firefly Gastropub, in the summer of 2020, and 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, wings, nachos and chicken pot pie on the menu.

Mr. McNinch said he met Mr. Salame when he came to the tavern to celebrate the purchase of Firefly with the restaurant’s former owner and two other people. Mr McNinch, who bought the Heritage in 2000, said he was not thinking of selling it when Mr Salame reached out.

“I didn’t know him at all and this deal just happened,” McNinch said. “I always had a number in my head and he hit it.” Mr. McNinch said he was paid more than $1.5 million and completed the deal in March 2021. Negotiations were conducted largely via email and through a broker, a- he declared.

Other purchases soon followed. Mr. Salame rolled them under the Lenox Eats Collective but largely left them untouched, Mr. McNinch said. The website lists five restaurants, including an ice cream shop, and another restaurant on the way.

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

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

His business activities have expanded 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 name appears to be a reference to Dogecoin, one of several crypto coins that have skyrocketed in value for some time.

The company was involved in the purchase of several condos in Port Isabel, Texas, and South Padre Island, Texas, according to property records.

Reached by telephone, Mr. Vandervoort said he did not wish to comment on his relationship with Mr. Salame.

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

Emily Flitter contributed report. Kirsten Noyes contributed to the research.

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