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According to a Guardian report, the defunct exchange FTX has already recovered $7.3bn of customer funds
Agents of the FBI have raided former FTX executive Ryan Salame’s house in Maryland as FTX customer funds recovery continues. While it wasn’t clear why, two unnamed sources noted that Salame’s lawyer had volunteered information about campaign finance activities before the search.
Since the FTX collapse, the case has been building quietly. However, it seems that prosecutors are looking to build their case against the company further by focusing on its political ties. In February, an unsealed indictment showed investigators pursuing an alleged attempt by Bankman-Fried and others to use political donations to gain political favors. Since then, prosecutors are targeting all assets and donations made during the political campaign.
Is Ryan Salame Also Guilty?
According to OpenSecrets, Salame was a leading donor during the 2022 political campaigns. He reportedly donated about $24 million, with most funds going to Republicans. FTX engineering chief Nishad Singh also donated massively during the campaigns.
While Salame has not been charged with any crimes yet, FTX co-founder Sam Bankman-Fried, Caroline Ellison, Gary Wang, and Nishad Singh have all faced charges. Sam Bankman-Fried maintained he was not guilty, the other execs pled guilty to fraud.
Meanwhile, Ryan Salame has been cooperating with the prosecutors to unravel the case. Recall that it was Salame that tipped off regulators when FTX started crumbling. He called out the co-mingling of FTX customer funds with Alameda Research to cover financial loss. Salame also noted that only three executives — Bankman-Fried, Singh, and Gary Wang — could approve such a transfer.
FTX Customer Funds Recovery
Invariably, the fraud case against FTX is built on this detail: FTX customer funds have been diverted for personal expenses or Alameda trading. According to a Guardian report, the defunct exchange FTX has already recovered $7.3bn of customer funds. Its Bahamas funds have also yet to be recovered due to the tussle between US prosecutors and Bahamas regulators.
While the actual shortfall in customer funds is unknown, the US Commodity Futures Trading Commission (CFTC) estimates the missing funds to be over $8 billion. However, the company may consider restarting operations by 2024 according to its lawyers.