On April 27th, the FBI descended upon the Potomac, Maryland home of Ryan Salame, the co-CEO of now-bankrupt cryptocurrency exchange, FTX. Salame is under investigation as part of the ongoing probe into the collapse of FTX, among other suspicious behavior and accusations of financial misappropriation, but also political donations totaling $24 million during the 2022 elections.
FTX Bankruptcy: Salame’s $87M, Political Donations Under Fire
Salame, who boasted a net worth of $87 million in bonuses and loans from FTX’s sister company, Alameda Research, was one of three former executives to benefit from the now-bankrupt firm’s trading house, alongside Sam Bankman-Fried who received $2.2 billion and former engineering director Nishad Singh and co-founder Zixiao “Gary” Wang who both received $587 million and $246 million respectively.
FTX’s new management, headed by attorney and bankruptcy specialist John Ray III, filed for bankruptcy in December 2022 and is now pursuing potential action against Salame and his transferees, looking for ways to claw back the funds.
Perhaps unsurprisingly, Salame was also a major political donor during the 2022 election, donating more than $23 million to Republican Party candidates. It is alleged these donations were made with customer funds provided by FTX and Alameda Research.
Revealing Salame’s Role in FTX Collapse
As questions around the probe may be answered, details have started to emerge regarding Salame’s involvement in the events leading to the collapse of FTX. According to court documents obtained by the Wall Street Journal, Salame was the first executive to begin assisting authorities with their investigation. It was Salame who blew the whistle to the Bahamian Securities Commission, informing them that FTX was sending customer funds to its sister trading firm Alameda Research and that the email transfer required three people to have access to the company accounts – Bankman-Fried, Wang, and Singh.
Sam Bankman-Fried’s Extradition Fight: Tensions Rise
It seemed that the case was about to unravel further when Sam Bankman-Fried was arrested in the Bahamas on Monday and is currently fighting extradition to the United States to face charges of conspiracy, fraud, and money laundering. However, tensions have grown between U.S. and Bahamian authorities since Salame broke the news of transfer of customer funds, with the Bahamian Securities Commission claiming John Ray’s remarks “do not appear to be concerned with facts but rather appear intended only to make headlines”.
Uncovering Salame’s Role in FTX Collapse
As the situation continues to develop, further details can be hoped for in the aftermath of the FBI’s search of Salame’s home. Both Salame’s lawyer and the FBI have declined to comment, leaving the public to speculate on the details of the investigation and what the FBI has uncovered.
What seems clear is that Salame is at the center of the events leading to the collapse of FTX, from aiding authorities in their investigation to his suspicious political donations at the height of the campaign season. Though the motive for Salame’s actions remain unclear, it appears that he is crucial in understanding how the cryptocurrency exchange collapsed last year, and perhaps how similar money laundering cases can be prevented in the future.
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