Local

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

The co-chief executive of an FTX unit who told regulators about wrongdoing at the exchange was a big Republican donor. He also bought restaurants.

Olde Heritage Tavern, one a few area restaurants owned by Ryan Salame, a top executive at the now-collapsed cryptocurrency exchange FTX, in Lenox, Mass., Dec. 16, 2022. 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. (Simon Simard/The New York Times)


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., 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, 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.

Advertisement:

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 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, 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.

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

Salame did not return multiple requests for comment. His lawyer, Jason Linder at Mayer Brown, also did not return requests for comment.

Born in Sandisfield, Massachusetts, a town of just 1,000 people in the Berkshires, Salame worked briefly at 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.

Advertisement:

Salame was not in Bankman-Fried’s inner circle, but he was fiercely loyal to him, according to people familiar with the matter. 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, 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.

As FTX grew, Salame began building his profile in Washington as a big Republican donor. During the midterm elections, Salame gave $24 million, primarily to Republican candidates and committees, while Bankman-Fried gave about $40 million, primarily to Democrats. Together, they formed a bipartisan megadonor tag team, with fundraisers 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 SBF 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.”

Advertisement:

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 Bond runs a lobbying group called the Association for Digital Assets Markets that was supported by FTX. (Salame once told a colleague that he and Bond were drawn together partly by their shared affection for Bankman-Fried, according to a person familiar with the interaction.)

Bond, who did not respond to requests for comment, has a photograph of herself and 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, Maryland, according to property records.

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

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 Bankman-Fried.

Salame once told a campaign fundraiser 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 fundraiser recalled.

Advertisement:

Given the flood of donations, 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 Salame as a “budding Republican megadonor.”

Prosecutors are now looking into campaign contributions tied to FTX. The indictment of 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 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 Salame or FTX executives other than Bankman-Fried by name.

As one of the executives in charge of FTX Digital, the exchange’s Bahamian subsidiary, 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 Salame and other FTX employees, 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, Salame became a familiar name as 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.

Advertisement:

A year ago, The Berkshire Eagle, the region’s local newspaper, noted that one of Salame’s first jobs as a teenager was working as a dishwasher at an eatery in nearby Great Barrington, Massachusetts. 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.

A few months later, Salame approached John McNinch, the owner of 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.

McNinch said he met Salame when he came to the tavern to celebrate the Firefly purchase with the restaurant’s former owner and two others. McNinch, who bought the Heritage in 2000, said he wasn’t thinking about selling it when Salame reached out.

“I didn’t really know him at all, and this deal just came about,” McNinch said. “I always had a number in my head, and he hit it.” 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. Salame rolled them under the Lenox Eats Collective but has largely left them untouched, McNinch said. The website lists five restaurants, including an ice cream shop, and another eatery on the way.

After the collapse of FTX, McNinch said, he reached out to Salame to see how he was doing but did not hear back.

Advertisement:

On his Lenox Eats biography page, 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 and South Padre Island, Texas, property records show.

Reached by phone, Vandervoort said he didn’t want to comment on his relationship with Salame.

“If you are interested in any information on his businesses, you should contact him,” Vandervoort said.

This article originally appeared in The New York Times.

Conversation

This discussion has ended. Please join elsewhere on Boston.com