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 struck gold as a top executive at FTX, the now-collapsed cryptocurrency exchange, and used some of that wealth to buy a few small restaurants in the area.
In Washington, D.C., Mr. Salame was hailed as a “budding Republican megadonor,” bankrolling candidates and political action committees, and 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 he told regulators in the Bahamas, where the exchange was based, that FTX was misappropriating billions in customer funds to prop up an allied crypto trading firm 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 dealings between FTX and Alameda, and committing fraud by using both companies as a “piggy bank.” Prosecutors said Mr. Bankman-Fried used customer funds to trade, buy expensive real estate, invest in other crypto firms, make political contributions and extend personal loans to executives.
So far, Mr. Bankman-Fried, who is being held without bail in a Bahamas prison, 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 is continuing and prosecutors are not done charging individuals.
Mr. Salame’s activities may be scrutinized, given that he was pivotal 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 lawyer, Jason Linder at Mayer Brown, also did not return requests for comment.
Born in Sandisfield, Mass., a town of just 1,000 people in the Berkshires, Mr. Salame worked briefly at the accounting giant EY. In 2019, he graduated from Georgetown University with a master’s 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 in 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 a purported commitment to giving away most of the money they made under the banner of “effective altruism.”
By contrast, Mr. Salame said at times that he was in crypto because it was a way to get rich, according to a person who knows him. He enjoyed expensive cars, flew on private jets and had a reputation for hard partying.
What to Know About the Collapse of FTX
What is FTX? FTX is a now bankrupt company that was one of the world’s largest cryptocurrency exchanges. It enabled customers to trade digital currencies for other digital currencies or traditional money; it also had a native cryptocurrency known as FTT. The company, based in the Bahamas, built its business on risky trading options that are not legal in the United States.
Who is Sam Bankman-Fried? He is the 30-year-old founder of FTX and the former chief executive of FTX. Once a golden boy of the crypto industry, he was a major donor to the Democratic Party and known for his commitment to effective altruism, a charitable movement that urges adherents to give away their wealth in efficient and logical ways.
How did FTX’s troubles begin? Last year, Changpeng Zhao, the chief executive of Binance, the world’s largest crypto exchange, sold the stake he held in FTX back to Mr. Bankman-Fried, receiving a number of FTT tokens in exchange. In November, Mr. Zhao said he would sell the tokens and expressed concerns about FTX’s financial stability. The move, which drove down the price of FTT, spooked investors.
What led to FTX’s collapse? Mr. Zhao’s announcement drove down the price and spooked investors. Traders rushed to withdraw from FTX, causing the company to have a $8 billion shortfall. Binance, FTX’s main rival, offered a loan to save the company but later pulled out, forcing FTX to file for bankruptcy on Nov. 11.
Why was Mr. Bankman-Fried arrested? FTX’s collapse kicked off investigations by the Justice Department and the Securities and Exchange Commission focused on whether FTX improperly used customer funds to prop up Alameda Research, a crypto trading platform that Mr. Bankman-Fried had helped start. On Dec. 12, Mr. Bankman-Fried was arrested in the Bahamas for lying to investors and committing fraud. The day after, the S.E.C. also filed civil fraud charges.
As FTX grew, Mr. Salame began building his profile in Washington as a big Republican donor. During the midterm elections, Mr. Salame gave $24 million, primarily to Republican candidates and committees, while Mr. Bankman-Fried gave about $40 million, primarily to Democrats. Together, they formed a bipartisan megadonor tag team, with fund-raisers on both sides of the aisle clamoring for access to a stream of donations that many expected to last decades.
The contributions were part of an effort by FTX executives to win supporters in both political parties as they sought to shape U.S. regulation around the cryptocurrency industry.
The campaign donation records reveal “a coordinated effort between S.B.F. and Ryan Salame, where they are making sure that they had all corners tucked,” said Craig Holman, an official at the watchdog group Public Citizen who focuses on ethics, lobbying and campaign finance rules. “It’s much more extensive than you usually 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 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 that was supported by FTX. (Mr. Salame once told a colleague that he and Ms. Bond were drawn together partly 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 herself and Mr. Salame at the top of her Twitter profile. He has the same one on his. This summer, the couple paid about $4 million in cash for a five-bedroom home in Potomac, Md., according to property records.
Mr. Salame donated $11,600 to Ms. Bond’s campaign when she ran unsuccessfully for Congress as a Republican this year in Suffolk County, N.Y., with backing from Donald Trump Jr. Her campaign also was 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 donated freely to other Republican candidates and to political action committees that supported them. His biggest donations — totaling $15 million — went to a PAC he started this year called American Dream Federal Action, which backed candidates supportive of cryptocurrency and pandemic preparedness, a pet cause of Mr. Bankman-Fried.
Mr. Salame once told a campaign fund-raiser who helped collect donations from the crypto industry that he was not particularly interested in politics and suggested that his donations were encouraged by others at FTX, the fund-raiser recalled.
Given the flood of donations, Mr. Salame was regarded as a rising star in Washington political circles. An invitation to a Washington cocktail party last month — just over a week before FTX filed for bankruptcy — hailed Mr. Salame as a “budding Republican megadonor.”
Prosecutors are now looking into campaign contributions tied to FTX. The indictment of Mr. Bankman-Fried accuses the FTX founder of conspiring with others to violate campaign finance laws that prohibit corporate donations to the campaigns of political candidates and bar donations “in the names 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 in excess of 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 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 potential problems at FTX, according to a public court filing. During a phone call with Mr. Salame and other FTX employees, Mr. Salame told Christina Rolle, executive director of the Securities Commission of the Bahamas, that customer money at FTX Digital had been transferred to Alameda “to cover financial losses of Alameda,” according to the filing.
Back in the Berkshires, Mr. Salame became a familiar name as he began his restaurant-buying spree in Lenox, Mass., 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 an eatery in nearby Great Barrington, Mass. Mr. Salame told the paper that he bought 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.
The Aftermath of FTX’s Downfall
The sudden collapse of the crypto exchange has left the industry stunned.
- A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? The Daily charted the spectacular rise and fall of the man behind FTX.
- Market Manipulation Inquiry: Federal prosecutors are said to be investigating whether Mr. Bankman-Fried manipulated the market for two cryptocurrencies, leading to their collapse.
- Parental Bonds: Mr. Bankman-Fried’s mother and father, who teach at Stanford Law School, are under scrutiny for their connections to their son’s crypto business.
- Frantic Exchanges: Texts from a group chat that included crypto leaders from rival companies showed the chief executive of Binance, another crypto exchange, accusing Mr. Bankman-Fried of orchestrating trades to destabilize the industry.
A few months later, Mr. Salame approached John McNinch, the owner of the Olde Heritage Tavern, with an offer to buy the eatery. 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 Firefly purchase with the restaurant’s former owner and two others. Mr. McNinch, who bought the Heritage in 2000, said he wasn’t thinking about selling it when Mr. Salame reached out.
“I didn’t really know him at all and this deal just came about,” 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 over email and through a broker, he said.
Other purchases soon followed. Mr. Salame rolled them under the Lenox Eats Collective but has largely left them untouched, Mr. McNinch said. The website lists five restaurants, including an ice cream shop, and another eatery on the way.
After the collapse of FTX, Mr. McNinch said, he reached out to Mr. Salame to see how he was doing but did not hear back.
On his Lenox Eats biography page, Mr. Salame said he founded the R Salame Digital Asset Fund in 2021 to provide scholarships to students of 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 name appears to be a reference to Dogecoin, one of many crypto coins that skyrocketed in value for a time.
The company has been involved in the purchase of several condos in Port Isabel, Texas, and South Padre Island, Texas, property records show.
Reached by phone, Mr. Vandervoort said he didn’t want to comment on his relationship with Mr. Salame.
“If you are interested in any information on his businesses, you should contact him,” Mr. Vandervoort said.
Emily Flitter contributed reporting. Kirsten Noyes contributed research.