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Our Opinion

Our Opinion: FTX's downfall spurs more drama than patience, but conclusive judgment of Ryan Salame must await the whole truth

It’s not too often that one of the biggest stories in the world partly plays out in our Berkshire backyard. As lawmakers, regulators and legal authorities try to peel back all the layers of FTX’s world-shaking collapse, many in our neck of the woods and beyond are asking the same thing: Who is Ryan Salame?

Native son. Crypto exec. Prolific investor,” read the front-page headline of the weekend Eagle. “Restaurateur. Political donor. Tipster,” was how a recent New York Times profile put it. Precisely how this Sandisfield native figured into the fall of a billion-dollar empire of crypto corruption, though, remains to be fully fleshed out.

As the former co-CEO of FTX’s Digital Markets subsidiary in the Bahamas, Mr. Salame was a top executive at the cryptocurrency exchange founded by crypto wunderkind-turned-international disgrace Sam Bankman-Fried. According to court filings, Mr. Salame was the one within FTX who blew the whistle. Two days before FTX filed for bankruptcy, Mr. Salame contacted Bahamian securities regulators to inform them that Mr. Bankman-Fried may have funneled customer investments from FTX to a hedge fund he also owned, Alameda Research.

Authorities arrested Mr. Bankman-Fried last week on charges of lying to investors and committing fraud by using FTX and Alameda as his personal piggy banks. So far, Mr. Bankman-Fried is the only FTX executive to be charged in the meltdown’s aftermath. That might change, though, as the U.S. attorney for the Southern District of New York in Manhattan said prosecutors are not done charging individuals as that office’s investigation continues.

Mr. Salame certainly will fall under that investigative spotlight as well. A friend of Mr. Bankman-Fried, Mr. Salame got in on the ground floor of FTX, although some sources close to both say that Mr. Salame was not in Mr. Bankman-Fried’s innermost circle. Over the last year, both gave tens of millions to political candidates and super PACs — Mr. Salame to Republicans, Mr. Bankman-Fried to Democrats — putting them among the biggest donors in the country in what was perceived as a full-court press to influence nascent crypto regulation. Then there is the matter of a $55 million personal loan that Mr. Salame received from Alameda Research, where Mr. Bankman-Fried allegedly siphoned billions in FTX investments.

As the whole world — including financial regulators and legal authorities — try to get clearer answers to the question “Who is Ryan Salame,” reactions are mixed in the South County region where he was born and raised. Some who spoke to The Eagle remember a hard-working kid who washed dishes at local restaurants who was “solid to the core.” Others are skeptical of a quick-rise crypto billionaire who has one foot stuck in the biggest financial scandal since Enron and the other planted firmly in the hospitality sector of a South County regional economy that thrives on tourism and reputation. Mr. Salame’s business holdings include about half of the eateries in Lenox.

At least for right now, there’s little sign of change at any of the establishments Mr. Salame owns in Lenox. For us and our readers, beneath the shockwaves in the crypto space and 21st-century financial regulation is a keen interest in just how this will impact our community as the financial scandal of a generation swirls around a man who owns a huge share of an entire town’s dining sector. While congressional committees and prosecutors sift through all the questions that need answering, a few loom large in our Berkshire backyard. What does the future hold for downtown Lenox, and the South County tourism sector more broadly, as Mr. Salame’s livelihood very publicly hangs in the balance? And speaking of people’s livelihoods, did any of the $55 million Mr. Salame was loaned by Alameda Research make its way into his Lenox restaurants — and was that money from the same pot of investor funds that Mr. Bankman-Fried allegedly lifted from FTX?

As much as we want answers, the truth right now is that we don’t have the whole truth — and we likely won’t for some time. We know that because of another Berkshire native’s recent testimony before Congress. John J. Ray III, a lawyer born and raised in Pittsfield, has spent his career parachuting into corporate disasters and picking up the pieces. Now, in addition to Enron and Nortel, he’s adding FTX Trading Ltd to his resume. Mr. Ray spoke to the House Financial Services Committee last week about sifting through the debris of FTX’s collapse. He said that sorting through the books of a multibillion-dollar business that collapsed in corruption with “no corporate controls” will require a timetable measured not in weeks but in months.

That is a long time to wait for clarity on the biggest financial fiasco in the international news cycle and some insight as to what it spells for a small Berkshire community. While it’s difficult to avoid speculation, we must have the patience to resist conclusively condemning or exonerating Mr. Salame; only the complete facts can do that. Until they are revealed — which we hope will be sooner but likely will be later — we are watching intently.

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