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In a significant development within the bankruptcy proceedings involving the defunct exchange FTX and its debtors, Ryan Salame, former co-chief executive of the company, has agreed to forfeit his $5.9 million Bahamas property as part of a plea deal in a criminal case.
This decision follows Salame’s guilty plea in September 2023, where he pleaded guilty to criminal charges and agreed to pay $5.6 million in restitution to the debtors.
According to a motion filed at the United States Bankruptcy Court for the District of Delaware by FTX Trading Ltd and affiliated debtors, Salame has committed to honoring the plea deal by transferring the property’s ownership to the debtors.
However, this transaction exempts the former FTX executive from making cash payments, as he will only be required to transfer ownership of his Bahamas residence to FTX Digital Markets Ltd.
“Salame will satisfy the Restitution Amount by transferring a residence he owns in the Bahamas, Unit No. 3A in the Marina Residences at Albany Building 10 Condominium, to FTX DM,” the filing read.
The debtors said that transferring the deed of ownership of the property is in their best interest as it prevents Salame from selling the residence cheaper due to the current economic situation impacting the Bahamas real estate sector.
Recent reports from Bahamas realtors have indicated a significant decline in high-end sales volumes in the region in 2023, aligning with broader market trends in other countries such as Australia.
Impact on Monetization and Background Details
Given the situation of the real estate sector in the Bahamas, allowing Salame to sell the property would hinder the debtors’ ability to monetize other Bahamian properties.
The former FTX executive originally purchased the property for $7.2 million in September 2021 through the Alameda Research Fund, with FTX Digital Markets facilitating the transaction.
The company sent an additional $8.1 million to Salame’s real estate attorney in November to complete the transaction.
Later on, Salame signed a promissory note to repay $8.1 million to Alameda. However, both FTX and Alameda filed for bankruptcy in 2022.
Legal Consequences and Sentencing
The following year, Salame was charged with conspiracy to make unlawful political contributions and defraud the Federal Election Commission. He was also charged for conspiracy to operate an unlicensed money-transmitting business, to which he pleaded guilty. Salame’s sentencing is slated for May 28, 2024, where the court will deliberate on the appropriate penalties for the offenses.
Earlier this year in March, the court handed down a 25-year prison sentence to former FTX CEO Sam Bankman-Fried (SBF) for several crimes related to money laundering and other fraud. The sentencing set a precedent for the severity of legal consequences in cases related to financial misconduct and fraudulent activities within the crypto sector.
