Home TECHNOLOGY Ryan Salame flipped on Sam Bankman-Fried about FTX

Ryan Salame flipped on Sam Bankman-Fried about FTX

by NYPost
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A top-ranking FTX executive last month flipped on Sam Bankman-Fried and his allies by tipping off Bahamian regulators about alleged malfeasance — two days before the doomed crypto platform filed for bankruptcy, according to court filings.

Ryan Salame, who served as co-CEO of FTX Digital Markets prior to its collapse, tipped off officials on Nov. 9 that FTX client funds were being secretly transferred to “cover financial losses” at Alameda Research — the sister cryptocurrency hedge fund also owned by Bankman-Fried.

The 29-year-old Salame told regulators that only three FTX executives had the authority required to approve the cash transfers — Bankman-Fried, FTX co-founder Gary Wang and former director of engineering Nishad Singh.

During a conference call with the executive director of the Bahamas’ Securities Commission, Salame said that “such transfers were not allowed and therefore may constitute misappropriation, theft, fraud or some other crime,” the filings said, according to Bloomberg.

Sam Bankman-Fried faces 115 years in prison.
AFP via Getty Images

Salame’s tip — which followed a bank run at FTX as panicked customers demanded the return of their crypto deposits — prompted a scramble among Bahamian authorities to investigate potential wrongdoing at FTX.

Like Bankman-Fried, Salame used his FTX fortune as a major political donor during the 2022 midterm election race. While Bankman-Fried was the second-largest donor to Democratic candidates and causes, Salame contributed $20 million toward Republicans.

The court filings showed that Bankman-Fried had apologized to the Bahamas’ attorney general, Ryan Pinder, on Nov. 9 for his “delayed responses.” His father, law professor Joseph Bankman, was reportedly CC’ed on the email message.

Ryan Salame
Ryan Salame was co-CEO of FTX Digital Markets.

“It’s been a hectic week but that’s on me. Myself, and Joe (cc’ed), will be responsive going forward,” Bankman-Fried wrote in a reference to his father.

In congressional testimony this week, new FTX CEO John Ray confirmed that he was “investigating” Bankman-Fried’s parents, Bankman and fellow Stanford law professor Barbara Fried, over their potential actions at the company.

Ray also revealed that Bankman and Fried had “received payments” from FTX and that Bankman had provided legal advice to his son.

Ryan Salame
Salame was a major GOP donor during the midterms.
Twitter / @michellebond111

FTX and more than 100 of its affiliates filed for bankruptcy on Nov. 11 — two days after Salame contacted officials. The bankruptcy followed a sudden liquidity crunch that ensued as investors scrambled to pull their money out of the sinking platform. That same day, Bankman-Fried resigned as CEO.

Bankman-Fried, 30, was arrested at his home in the Bahamas on Monday and slapped with eight federal charges, including wire fraud, conspiracy to commit wire fraud, securities fraud, money laundering and violations of campaign finance laws. He faces up to 115 years in prison if convicted on all counts.

Catch up on The Post’s latest in the Sam Bankman-Fried FTX scandal

Bankman-Fried is locked up in a rat-infested Bahamian jail until his next court date in February.

Ryan Salame
Ryan Salame with his girlfriend Michelle Bond.
Twitter / @michellebond111

The court filings provided the first concrete sign of an FTX insider cooperating with authorities on alleged misdeeds by Bankman-Fried and his close-knit circle of advisers.

Caroline Ellison, Bankman-Fried’s ex-lover and the former CEO of Alameda Research, was reportedly photographed at a coffee shop in Lower Manhattan earlier this month and has hired Stephanie Avakian, a partner at white-shoe law firm Wilmer Hale and former SEC enforcement division chief, to represent her in litigation.

Ellison’s actions have sparked rampant speculation that she could flip on Bankman-Fried.

Sam Bankman-Fried
Sam Bankman-Fried was arrested in the Bahamas this week.

Howard Fischer, a former SEC attorney, told The Post this week that Ellison is likely working with the feds as they pursue their case.

“She would have among the greatest incentives to cooperate, as it was seeming likely that in his effort to exculpate himself, Bankman-Fried would try to finger her,” Fischer said.

This story originally Appeared on NYPost

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