TL;DR:
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The FBI searched the home of Ryan Salame, a former executive of the now-bankrupt cryptocurrency exchange FTX, as part of an ongoing probe into the exchange’s collapse.
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Authorities are investigating $24 million in political donations that Salame made during the 2022 midterm elections, with allegations that the majority of the total $90 million donated by ex-FTX employees were taken from customer funds.
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Prosecutors allege that Bankman-Fried, FTX’s founder, recruited executives, including Salame, to act as proxies for his company and donate tens of millions of dollars to Republican and Democratic candidates alike.
The ongoing probe into the collapse of FTX has led authorities to search the home of Ryan Salame, a former executive of the cryptocurrency exchange, according to a report from The New York Times. Salame, who formerly co-led FTX’s Bahamas operation, is reportedly under investigation as part of the probe. Prosecutors are looking into $24 million in political donations that Salame made during the 2022 midterm elections, and allege that the majority of the total $90 million donated by ex-FTX employees were taken from customer funds. Salame’s wealth increased substantially during the crypto market boom, as he reportedly obtained $87 million in bonuses and loans from FTX’s sister company, trading firm Alameda Research.
Prosecutors allege that Bankman-Fried, FTX’s founder, recruited executives, including Salame, to act as proxies for his company and donate tens of millions of dollars to Republican and Democratic candidates alike. During a so-called “PR tour” following FTX’s descent into bankruptcy last year, Bankman-Fried said in an interview that he donated approximately the same amount to both parties.
The FBI’s investigation into FTX has been ongoing for several months and has now led to the search of Salame’s home. According to sources, authorities are looking into $24 million in political donations made by Salame during the 2022 midterm elections. It is alleged that a significant portion of the $90 million donated by former FTX employees, including Salame, was taken from customer funds. The donations were made to both Republican and Democratic candidates, including the campaign of Republican Representative George Santos.
Salame, who was previously co-leading FTX’s Bahamas operation, reportedly obtained $87 million in bonuses and loans from FTX’s sister company, Alameda Research, during the crypto market boom. Court documents obtained by the Wall Street Journal revealed that Salame tipped off Bahamian authorities to the cryptocurrency exchange using customer funds to cover losses by Alameda after the collapse of FTX in November.
Prosecutors allege that FTX founder Sam Bankman-Fried recruited executives, including Salame, to act as proxies for his company and donate tens of millions of dollars to both parties. Bankman-Fried himself claims to have donated approximately the same amount to both parties during a “PR tour” following FTX’s bankruptcy, with all his Republican donations being “dark” due to the Citizens United U.S. Supreme Court case that protected political donations by corporations and unions.
Salame’s home search comes amid increased scrutiny on the crypto industry by regulators and authorities, including the SEC’s enforcement action against Coinbase, the leading cryptocurrency exchange in the US. It remains to be seen how the ongoing investigations into FTX and its executives will affect the wider cryptocurrency industry and its relationship with regulators and authorities
Salame’s wealth increased dramatically during the crypto market boom, as he reportedly obtained $87 million in bonuses and loans from FTX’s sister company, trading firm Alameda Research. However, the FBI is now investigating him for his alleged involvement in the use of customer funds to cover losses at Alameda. According to court documents obtained by the Wall Street Journal, Salame tipped off Bahamian authorities to FTX’s use of customer funds to cover losses by Alameda, while serving as FTX Digital’s chairman.
The latest FBI search on Salame’s home is part of the ongoing investigation into the collapse of FTX. Prosecutors have alleged that Bankman-Fried, the founder of FTX, recruited executives to act as proxies for his company and donate tens of millions of dollars to Republican and Democratic candidates alike. The investigation is looking into $24 million in political donations that Salame made during last year’s midterm elections, and authorities allege that the majority of the total $90 million donated by former FTX employees, including Salame, was taken from customer funds.
In response to the investigation, Jason Linder, Salame’s attorney, declined to comment. The allegations against Salame and FTX are serious and could have significant implications for the wider cryptocurrency industry. The collapse of FTX, once one of the most valuable cryptocurrency exchanges in the world, has already shaken investor confidence, and any further revelations of wrongdoing could cause even greater damage.
The investigation into FTX comes amid growing scrutiny of the cryptocurrency industry from regulators and law enforcement agencies around the world. Governments are increasingly concerned about the potential for cryptocurrency to be used for money laundering, tax evasion, and other illegal activities. As a result, authorities have stepped up their efforts to regulate the industry, with some countries, such as China, going so far as to ban cryptocurrency entirely.
In the United States, the Securities and Exchange Commission (SEC) has been cracking down on cryptocurrency exchanges and other firms that it believes have violated securities laws. The SEC’s actions have caused significant upheaval in the cryptocurrency industry, with some exchanges opting to delist certain tokens to avoid regulatory scrutiny.
The investigation into FTX and the alleged misuse of customer funds is a further sign that regulators are taking a hard line on the industry. It remains to be seen what the outcome of the investigation will be, but the allegations against Salame and FTX are serious and could have far-reaching consequences for the cryptocurrency industry as a whole. As the industry continues to grow and evolve, it will be important for regulators to strike a balance between protecting investors and allowing innovation to flourish.
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