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Ryan Salame

FTX: Here’s Who Tipped off Bahamas Regulators’ About FTX’s Doings

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Just two days before the cryptocurrency exchange was forced to close, a senior executive at FTX’s Bahamian subsidiary alerted local regulators to possible fraud.

Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), informed the Securities Commission of the Bahamas (SCB) on November 9 that FTX was sending client funds to its sister trading company Alameda Research, according to Bahamian court documents filed on December 14.

Salame mentioned the funds were used by FTX to cover Alameda’s losses

Salame claimed that the transfer was “not allowed or consented to by their clients” and that the money was intended to “cover financial losses of Alameda.”

Additionally, he informed the SCB that only three individuals—former FTX CEO Sam Bankman-Fried, co-founder Zixiao “Gary” Wang, and FTX engineer Nishad Singh—had the authorization needed to transfer client assets to Alameda.

The claim prompted Christina Rolle, executive director of the SCB, to request an investigation from the commissioner of the Royal Bahamas Police Force because the information “may constitute misappropriation, theft, fraud or some other crime.”

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FTX: Here’s Who Tipped off Bahamas Regulators’ About FTX’s Doings 2

The SCB froze the company’s assets the following day, on Nov. 10, and the Bahamian Supreme Court hired a provisional liquidator to try to protect the company’s assets.

The records show the first recorded example of an FTX or Alameda executive assisting law enforcement.

According to the filings, Salame is reportedly in Washington, D.C. He hasn’t made any public statements since the exchange’s demise. His final tweet was a “lol [sic]” response to Binance co-founder Yi on his explanation of the exchange’s decision to sell its FTX Token holdings on November 7.

Authorities believe that a second former executive from one of FTX’s affiliated companies has been cooperating with them lately.

On December 4, rumors abounded after images purportedly showing Alameda CEO Caroline Ellison in a New York coffee shop just a short distance from the U.S. Attorney’s Office surfaced online, leading some to speculate that she might have been working out a deal with law enforcement following the collapse of SBF’s exchange.

Since only Bankman-Fried has been charged thus far, there is more reason to believe that executives from both companies are cooperating with law enforcement.

FTX flexes its muscle by pumping $4M to a Republican PAC

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In a show of strength, FTX Digital Markets co-CEO Ryan Salame has contributed $4 million to a new political action committee or PAC that claims to support “forward-looking Republican candidates who want to protect America’s long-term economic and national security.”

As revealed by Politico, the FTX top exec will unveil the new PAC dubbed American Dream Federal Action which will have a broader focus on national and economic security, in addition to cryptocurrency. Announcing the same, Salame released a statement saying,

“We look forward to supporting forward-looking conservative leaders who understand the urgency of advancing smart policies that set America up for success.”

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FTX flexes its muscle by pumping $4M to a Republican PAC 4

What is crypto PAC?

For the uninitiated, it is a political organization, that comprises a cadre of crypto heavyweights to represent its interests in DC. The crypto market has seen its participants gradually flex their muscles to mount pressure on the skeptical Washington political class.

Several crypto-focused firms and top-level executives have in the past committed to numerous initiatives to expand their involvement in the midterm election campaign and make their voices heard in the mainstream.

It’s the latest example of cryptocurrency interests spending cash across the election landscape as individual candidates embrace bitcoin on the campaign trail and Congress eyes new regulations. However, Salame isn’t the only crypto executive launching a political group.

FTX also remains the primary backer of super PACs

Earlier in 2022, a group of crypto financiers launched GMI PAC, aiming to spend $20 million to boost congressional candidates. Salame is among the super PAC’s early backers, along with CMS Holdings co-founder Dan Matuszewski and SkyBridge Capital, the hedge fund led by former Trump communications director Anthony Scaramucci.

Another instance of cryptocurrency moguls pouring millions into congressional primary elections was Protect Our Future PAC and Web3 Forward, both called super PACs, which spent above $2 million to boost Texas Democrat Jasmine Crockett in the March elections.

FTX co-founder and CEO Sam Bankman-Fried are involved in Protect Our Future, while Web3 Forward is linked to GMI PAC.

The rise of crypto PACs comes as federal agencies have been working on crypto regulation in the past year. Some remain highly skeptical, but others feel the changes are necessary for both national security and economic stability.