Fallen FTX sues Ryan Salame for $98.8 million over alleged fraud

The bankrupt FTX exchange has filed a lawsuit against Ryan Salame, the former co-CEO of its Bahamian subsidiary, seeking to recover approximately $98.8 million in cash and crypto, according to a Nov. 4 court filing.

The failed firm accuses Salame of knowingly assisting other executives—most notably, founder Sam Bankman-Fried—in breaching fiduciary duties and misappropriating customer assets.

According to FTX:

“Despite Salame’s concerted efforts to obscure his receipt and expenditure of misappropriated Debtor assets, it is evident that Salame reaped substantial benefits from his role in ‘perpetrating aspects of the interrelated frauds that Bankman-Fried carried out at both companies.’”

The exchange contends Salame personally gained from his involvement and received significant compensation between November 2020 and November 2022. FTX alleges that during this period, Salame received $52.9 million in wire transfers, $29.8 million in cash and crypto withdrawals, and over $7.7 million in salary and bonuses.

He reportedly acquired nine million FTT tokens, sold 1.1 million for $24 million, and invested the proceeds in assets like luxury cars, businesses, and a $2.3 million stake in RedBird Capital Partners Fund IV.

The FTX lawsuit also draws attention to Salame’s guilty plea. During her unsuccessful Congressional campaign, he admitted to conspiring to make false statements to banks as part of an unlicensed money-transmitting business and making an excessive political donation to his former partner, Michelle Bond.

The exchange continued that Salame misused estate funds by withdrawing $5 million from his FTX.com account on Nov. 7, 2022. These funds, they allege, went toward personal expenses, including a public relations firm and a $20,000 personal charge at Restoration Hardware.

FTX has asked the court to disallow Salame’s claims in the exchange’s Chapter 11 proceedings until he returns all assets acquired through these transfers. This includes cash, crypto, and real estate spanning multiple locations—Connecticut, Miami, Portugal, Hong Kong, and Bali—obtained with the allegedly misappropriated funds.

In October, Salame began a 90-month prison sentence following his guilty plea to conspiracy charges related to illegal political contributions and fraud against the Federal Election Commission. Alongside his prison term, Salame agreed to forfeit $1.5 billion.

Additionally, he received a three-year supervised release order and must pay over $6 million in forfeiture and $5 million in restitution.

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