How Ryan Salame's Neighbors Got Tangled Up In FTX's Fallout

there is feeling the effects of the ft X bankruptcy. Nonetheless, the reason why is a gentleman named Ryan Salem, the former co CEO of FTX Digital Markets, who was also it turns out, a major player in the economy of Lenox. Salem grew up in Berkshire County, of which Lenox is apart. The town has fewer than ten thousand residents, actually closer to five thousand, according to the most recent sense us.

In March, the county's local newspaper, The Bookshire Eagle, reported that Salem owned multiple restaurants and other properties in the town. What's going to happen to those restaurants now that ft X has filed for bankruptcy and Salem is out of a job. Bloomberg reporter Carl I Wanna has the latest. There are questions of, yeah, what happens to the restaurants, to the food truck when their owner is somebody who, like we said, has up in charge. But it's obviously

somehow embroiled in this scandal. Carly, welcome back to the show. Thank you for having me. How did you end up reporting on Ryan Salem? Was because I told you too. You said it would be interesting to know more about Ryan Salem, and I said, okay, and what did you find out about this dude? Who was the former co CEO of FTX Digital Markets. Right, So a shout out to local journalism on a quick google, Ryan Salem's name

came up. This was a month or two ar ago with the Berkshire Eagle, which is a local paper out of western Massachusetts, and they had done an extensive amount of reporting on him, not only since the collapse of f t X, but also in the years leading up to it. Because Ryan Salem, as it turns out, is actually from Western Massachusetts. So I quickly learned by reading their excellent reporting both before the collapse of fd X and after that, he had been heavily invested in the

local restaurant scene in Lennox, Massachusetts. He had bought up a lot of real estate and restaurants and ice cream store as well. It's a really interesting trajectory and so that kind of spurred an interest in what is that. So I then went through local property records and confirmed that it was in fact over six million dollars that was invested into the restaurant scene of I mean, this

town is small and Atlantic Passachusetts. It is like five thousand plus people according to the census data, and he was a heavyweight in their restaurants scene. He also just owned random plots of land as well. So if I remember correctly, and I'm going to quote some of your story, he owns five dining enterprises, including two restaurants, a dessert shop, a catering company, and a food truck called the lunch Pail. Yes,

the lunch Pail. Incredible. One of the things that struck me about this reporting is it was so unexpected, right, so as we start reporting on this, it was before everything came out about the ft X bankruptcy. It was before Sam Bankman Freed showed up in a court in New York to plead not guilty. And this dude, Ryan Salem, while he was an important player in the ft X ecosystem, in the Bahamas, he wasn't necessarily super well known outside

of Western Massachusetts. He's still not been charged with any crimes at all. It turned out, according to court filings in the f t X case, that even prior to FTX filing from bankruptcy, he went to local Bohemian regulations and said, I have concerns about what's going on here. Several days prior to the collapse of f t X, one of the most senior people at f t X was already tipping off authorities in the Bahamas about possible

misuse of funds. So this executive is someone called Ryan Salam and essentially he was the former co CEO at FTX Digital Markets and basically he told regulators in the Bahamas. So we know more about him from the perspective of, you know, this was a high ranking executive in this crypto empire that has disintegrated. What did you learn about him as a person from Western mass locals understandably, so we're not super keen on talking that much about the situation.

That said, though, people who would speak with me said that he was a hometown guy, that he had vested interest in the community, and you know, he grew up in the area. His investments in the community. One person told me he seemed genuine. He really seemed like he did and does have an interest in that community itself. You know, he even went to college around the area.

He went to the University of Massachusetts Amherst. So there is this kind of sense of this was a young guy, he was from the area, and you know, he thought it would be i don't know, fun or cool or maybe even a good investment to go into these local properties. It should be noted too, that he did a lot of these investments in restaurants during the COVID nineteen pandemic, So there were questions even at the time of why restaurants.

Right now when there's staffing shortages and labor issues, there's a lot of questions about why he did it. But at the end of the day, it did kind of seem like he had this this interest and I don't know, giving back to the community, helping out being a part of the community that he kind of grew up around,

and in again shout out to local journalism. One of the articles in The Berkshire Eagle was noting that, you know, his parents still live within commuting distance of Lennox, and he had said to the reporters at the time that he wanted these investments and restaurants to be like real going concerns. Right. It didn't sound like it was just a hobbies, Like I want these things to make money.

So what's going to happen to them now? Again, while he hasn't been charged with a crime in the US, you know, no US prosecutor has come out and said anything about his involvement in the collapse of f t X. He doesn't have a job, right. A lot of the money that he had had is tied up in ft X and ft X accounts. There are court filings that suggest he borrowed significant amounts of money from Alameda Research, which is one of the bankrupt entities at the center of the ft X empire, in the amount of I

think fifty five million dollars. So there are questions over you know, where the money came from, or or he's going to continue to go. What are the folks who own and work in these restaurants saying in this aftermath of everything that happened, People there say that the restaurants are still operating as normal. In the month of December. I called number of people who said they were, you know, the restaurants were packed, Firefly and you know, all Heritage tavern.

We're still doing business as normal. The lunch pale was, you know, food trucking around. As it may, Ryan's land wasn't really involved in the day to day operations of these businesses. Instead, he kind of funneled that to somebody also local manager. Her name was Jane Blanchard. She declined to comment. All she had to say was that she was, in fact a big Ryan fan. The reality is, though he was not involved in really keeping them afloat day

to day managing their operations. That said, though, you know, he is their owners. So there are questions of, yeah, what happens to the restaurants, to the food truck when their owner is somebody who, like said, was up in charge, but as obviously somehow embroiled in this scandal and talking to people to again, really really small town, it's probably pretty wild that your small town is now the center of this thing that is huge and pertains to and

relates to fraud. So I do wonder if there are questions about maybe the ownership is something dicey for the restaurants themselves. But I think I want to go back to this idea of the the outsized effects of this FTX collapse, because you know, one of the things about crypto, and there's a lot of focus on crypto as technology, right, Like we we laugh at the phrase the underlying technology, but we do. We do a lot of reporting on the technology of the thing, on the markets, on the prisis,

on what's going on up down sideways. But crypto is also, much like any other industry, something that's filled with people and often very colorful characters and very colorful people. And you've been involved in other stories that we've done, not only about Ryan Salem, but about other execs at ft X and in crypto. What are some of the key things that you have observed in terms of the personalities in this space that seemed to make it perhaps uniquely

prone to these sorts of scandals. M That's a really interesting question. I think the thing that stuck out to me the most is that these people were young, and there are questions after ft X collapsed of what were they doing with their money and potentially even I mean f t X is money, there was a lot of loans given out and it's hard to establish wonder on relationships of what loans went exactly where. But the reality is there was exorbitant spending in a number of things.

Six million dollars is a lot of money to invest in the local restaurants scene, in the real estate of a small town in western Massachusetts. But that's also penny is compared to the real estate that was in the Bahamas, or the massive, massive political contributions that were given to various campaigns. Ryan Salem himself was a large Republican donor, but others at f t X were large generals themselves,

many of them to Democrats. So I think there's a lot of I don't want to use the word effective altruism because that is a very specific thing, but right right, we do, and I think that it it just becomes a you know, it becomes an all encompassing thing. But there was this idea of these young people who are I mean flooded with money, and what do you do

with it? What can you do with it? And the reality is some of it went to charitable endeavors, some of it went to random stuff like I mean, restaurants in Lenox, Massachusetts. But there's questions of where should it have gone and whose money was it up. Next, you'll hear more from Bloomberg report to Coli Wanna on the

long tentacles of the fd X fallout. You mentioned the political contributions, and those are one of the things that did come up in the criminal allegations against Sam Bankman Freed, which he's denied, was that, you know, the way that they made those donations was not in compliance with relevant laws. And I think that at the center of a lot of this is what what you've identified. It's it's not only what did they spend the money on, but it's

also where did the money come from? Right, Because a key claim here is that FTX used customer funds inappropriately, and that is that the heart of the bankruptcy filing. It's at the heart of what is going to be

a very long and complex set of criminal cases. And if it is found by judges lawyers restructure as all of these folks that customer funds were used here, then one of the things that folks are staring down is what's called clobax, right, this idea that you're a politician, you're gonna have to figure out how to give back those campaign donations, or you're a nonprofit you have to give out give those donations, or potentially you're charming little

restaurants and now you're going to be caught up in bankruptcy filings, which is not a not a fun thing for folks to be considering. Right, Yeah, and it should be said to that he purchased these properties through individual companies that he had registered. So we found, I mean a lot several companies that he had Ryan Salem formed and purchased properties Slash real Estate through, so those were not tied up and necessarily the the on entities that FTX,

you know, entered into Chapter eleven bankruptcy proceedings in November. However, there are questions of what happens those entities if their founder is embroiled in those bankruptcy proceedings, even though no

charges haven't breast Gainst him obviously got it. And I think just as a as another kind of consideration, you know, sometimes what happens is when you have a person who is very famous and their name, even if it's not in the building, is like strongly associated with the brand I'm thinking of, like Mario Vitalian easily or Donald Trump and hotels and soho that what happens next is kind of a pr campaign of like, um, we're moving on from that part of our history. The picture has come down.

You know, there's a new coat of pains. There's like new owners, same restaurant. Everything's great. Did you get any sense from the folks who were willing to speak to you that this controversy is something that they're just trying to be like, we're going to move forward, we don't want to talk about it anymore. Absolutely. I think that's also why people probably in some ways didn't want to speak to me too about it, is because this is something that this is not the town's fault. The town

did not do this, this is not their responsibility. But now they are caught up in this because their owner, Ryan Salem, is a name that is associated with ft X. Right, So even them saying like oh it is business as normal, people not wanting to really comment on it. They're only comments being you know, fairly positive things to say about Ryan Salem. I mean, the reality is that fd X

is being accused of doing some pretty bad things. In regard us of what his role and it is, it probably doesn't make a lot of sense for people in the town to start helving off against Ryan Salem, like it really does probably make the most sense to just move forward and continue your business as normal. And again, this is a really small down so I have to kind of hope that the restaurants and the ice cream store in the catering company and food truck will we

find because it's a small downtown. There's doesn't seem like they are that many options where you eat. It seems like the people like the food, So I hope that there is a you know, local sentiment that drives it forward past Ryan Salem, if that is what it comes to, right.

This is very different from reporting that you've also done about say like Margharitaville, which is going to continue to be fine and attract an international clientele who's going to spend you know, large amounts of money on big checks in in the Bahamas. So a completely different vibe. But Crypto intains multitudes clearly, yes, And Onion, Carlie, thank you for being on the show. Thank you for having me.

That was Bloomberg Report, carl Juanna. You can find more of her reporting on the Bloomberg Terminal and on Bloomberg dot com and be sure to check out our twice weekly newsletter, Bloomberg Crypto. This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts. Send us your comments, questions, or suggestions for the show to Crypto

at Bloomberg dot net. The supervising producer of Bloomberg Crypto is Vicky very Galina. Our senior producer is Janet Babin. Our producers are Mohammed Farouk and Sharon Barriro. Our associate producers are Ty Butler and Moses on Them. Desta wonder At is our engineer. Original music by Leo Sidron. I'm Stacy Mariashmal. We'll be back tomorrow