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

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

In Washington, DC, Mr. Hailing Salame as a “budding Republican mega-donor,” funding candidates and political action committees, establishing FTX’s presence as a crypto heavyweight invested in shaping the regulation of the nascent industry.

Now Mr. Salame has emerged as a central player in the scandal surrounding FTX after telling regulators in the Bahamas, where the exchange was based, that FTX was embezzling billions in client funds to support an allied crypto trading company called Alameda Research .

On Monday, Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas, charged with lying to investors, lenders and customers about the tight financial dealings between FTX and Alameda, and committing fraud by labeling both companies as a “piggy bank.” to use. .” Prosecutors said Mr Bankman-Fried used client money 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 prison in the Bahamas, is the only FTX executive charged with misconduct. But Damian Williams, the U.S. Attorney for the Southern District of New York in Manhattan, said the investigation is continuing and prosecutors have not finished indicting individuals.

Mr. Salame’s activities can be scrutinized given that he played a vital role in 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 respond to multiple requests for comment. His attorney, Jason Linder at Mayer Brown, also declined to respond to requests for comment.

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

Mr. Salame was not of Mr. Bankman-Fried’s circle, but was very loyal to him, according to people familiar with the matter. Mr. Bankman-Fried and his closest advisers all shared a supposed commitment to give away most of the money they made under the banner of “effective altruism.”

Mr. Salame, on the other hand, sometimes said 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 hard.

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

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

The campaign donation data reveals “a coordinated effort between SBF and Ryan Salame, making sure they’ve got all the corners tucked in,” said Craig Holman, an official with the watchdog group Public Citizen that focuses on ethics, lobbying and campaign finance rules. . . “It is much more extensive than you normally see when someone tries to launder money to office holders and candidates.”

Mr. Salame split his time between the Bahamas and Washington, where he lived with his girlfriend, Michelle Bond. The pair quickly became something of a crypto power couple in the nation’s capital, where Ms. Bond runs a lobbying group called the Association for Digital Assets Markets, which was backed by FTX. (Mr. Salame once told a colleague that he and Ms. Bond were drawn to each other in part because of 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 her Twitter profile. He has the the same on his. This summer, according to property records, the couple paid about $4 million in cash for a five-bedroom home in Potomac, Md.

Mr. Salame donated $11,600 to Mrs. Bond’s campaign when she unsuccessfully ran for Congress this year as a Republican in Suffolk County, NY, with support from Donald Trump Jr. Her 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 funding from another PAC that Mr. Salame helped create and fund with FTX.

Mr. Salame donated freely to other Republican candidates and to political action committees that supported them. His largest donations — $15 million in total — went to a PAC he started this year called American Dream Federal Action, which supported candidates supporting cryptocurrency and pandemic preparedness, a favorite cause of Mr. Bankman-Fried.

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

Given the deluge of donations, Mr. Salame was considered a rising star in Washington political circles. An invitation to a cocktail party in Washington last month – a little over a week before FTX filed for bankruptcy – praised Mr Salame as a “republican mega-donor in the making”.

Prosecutors are now investigating campaign contributions linked to FTX. The indictment against Mr Bankman-Fried accuses the FTX founder of conspiring with others to violate campaign finance laws that prohibit corporate donations to political candidates’ campaigns and prohibit donations “in the name of other persons” – commonly known as “straw” donations . Authorities said Mr Bankman-Fried may have used straw donations to enable FTX to make political contributions that exceed the limits of the federal electoral law. The indictment does not name Mr. Salame or any other FTX executives except Mr. Bankman-Fried.

As one of the executives responsible for FTX Digital, the exchange’s Bahamian subsidiary, Mr. Salame is in regular contact with the country’s securities regulators. On Nov. 9, two days before FTX filed for bankruptcy, Bahamian regulators began investigating possible problems at FTX, according to a public indictment. During a telephone conversation with Mr. Salame and other FTX employees, Mr. Salame told Christina Rolle, Executive Director of the Securities Commission of the Bahamas, that customer funds at FTX Digital had been transferred to Alameda “to cover Alameda’s financial losses”, according to the declaration.

Back in the Berkshires, Mr. Salame became a household name when he began buying restaurants 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 newspaper, noted that one of Mr. Salame’s first jobs as a teenager was working as a dishwasher at a diner in nearby Great Barrington, Massachusetts. Mr Salame told the paper that he will open his first restaurant, the 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 eatery. Established 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 Firefly with the restaurant’s former owner and two others. Mr. McNinch, who bought the Heritage in 2000, said he was not thinking of selling it when Mr. Salame got in touch.

“I didn’t know him at all and this deal just came about,” said Mr. McNinch. “I always had a song in my head and he hit it.” Mr McNinch said he was awarded more than $1.5 million and closed the deal in March 2021. Negotiations were conducted largely over email and through a broker, he said.

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

After the collapse of FTX, Mr McNinch said, he contacted Mr Salame to see how he was doing but heard nothing back.

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

His business activities extended beyond FTX and restaurants. In the summer of 2021, he founded a company in Texas called Dogemewn LLC with Ryan Vandervoort, also 29, who lives in another town in the Berkshires. The company name seems to be a reference to Dogecoin, one of many crypto coins that skyrocketed in value for a while.

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

Reached by phone, Mr Vandervoort said he would not comment on his relationship with Mr Salame.

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

Emily Flasher reporting contributed. Kirsten Noyes contributed research.