A small town in western Massachusetts is bracing for the potential fallout from the collapse of the FTX cryptocurrency exchange after ex-FTX executive Ryan Salame invested $6 million in restaurants and small businesses in the town. The bankruptcy of FTX and its affiliates has likely wiped out the funds of countless investors, raising concerns about the financial problems spreading to other companies directly or indirectly related to FTX.
Salame, who was the co-CEO of FTX Digital, has reportedly invested about $6 million in various restaurants and small businesses in Lenox, Massachusetts since the summer of 2021. Lenox is a quaint town of about 5,000 people in western Massachusetts, Berkshire. County about 20 miles away from Sandisfield, the hometown of Salame.
The Berkshire Eagle reported that Salame owns several dining options in Lenox, including Firefly Gastropub & Catering Co., The Olde Heritage Tavern, Sweet Dreams bakery and ice cream shop, and a food truck called The Lunch Pail. Salame reportedly lives primarily in the Bahamas, where FTX is headquartered, and is not involved in the day-to-day management of the small businesses.
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While there has been an air of uncertainty following the FTX meltdown, the Eagle reported that there are few outward signs of change in the local businesses, and they have simply moved on in the weeks since the crypto company and its affiliates imploded.
According to bankruptcy filings, Salame received a $55 million loan from Alameda Research – the hedge fund and trading arm of FTX that Sam Bankman-Fried co-founded. Bankman-Fried reportedly received a $1 billion personal loan from Alameda, while former FTX tech chief Nishad Singh received a $543 million loan from the hedge fund.
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Salame made headlines last week following the arrest of Bankman-Fried in the Bahamas on Monday, when Bahamian officials claimed in court documents filed Wednesday that Salame informed them on Nov. 9 that client assets “that may have been owned” on the FTX exchange had been transferred to Alameda to “cover financial losses” at the hedge fund.
He reportedly warned that the transfers were “not authorized or approved” by the customers and said the only individuals with access to make the unauthorized transfers were Bankman-Fried, Singh and co-founder Zixiao “Gary” Wang.
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At the time, FTX was under mounting financial pressure as the exchange experienced the crypto equivalent of a bank run triggered by a $6 billion surge in customer withdrawals. FTX, which was once valued at $32 billion, and its subsidiaries filed for bankruptcy on Nov. 11.
The Wall Street Journal previously reported that Caroline Ellison, who was Alameda’s CEO, told Alameda staff in early November that FTX used customer money to support Alameda’s finances and that she, Bankman-Fried and other members of the management were aware of the decision.
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As of December 18, Bankman-Fried is the only director of FTX or Alameda to have been charged with a felony. He faces eight federal charges carrying a maximum combined sentence of 115 years in prison.
Breck Dumas of Fox Business contributed to this story.