Key Points
- Former FTX executive, Salame, surrenders his $5.9M Bahamas property as part of a plea deal.
- The transaction exempts Salame from making cash payments, instead he will transfer property ownership to FTX Digital Markets Ltd.
Salame, an ex-executive of FTX, has agreed to surrender his property in the Bahamas, valued at $5.9 million, as part of a plea agreement.
This decision comes after Salame pleaded guilty to criminal charges in September 2023 and agreed to pay $5.6 million in restitution to the debtors.
Details of the Agreement
A motion filed at the United States Bankruptcy Court for the District of Delaware by FTX Trading Ltd and affiliated debtors reveals that Salame has committed to honoring the plea deal by transferring the property’s ownership to the debtors.
This agreement means Salame will not be required to make cash payments. Instead, he will transfer ownership of his Bahamas residence to FTX Digital Markets Ltd.
According to the filing, “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 debtors believe that this transaction is in their best interest as it prevents Salame from selling the residence at a lower price due to the current economic situation impacting the Bahamas real estate sector.
Reports from Bahamas realtors have indicated a significant decline in high-end sales volumes in the region in 2023, a trend that aligns with broader market trends in other countries such as Australia.
Background and Implications
The situation of the real estate sector in the Bahamas suggests that allowing Salame to sell the property could hinder the debtors’ ability to monetize other Bahamian properties.
Salame originally purchased the property for $7.2 million in September 2021 through the Alameda Research Fund, with FTX Digital Markets facilitating the transaction.
Later, Salame signed a promissory note to repay $8.1 million to Alameda. However, both FTX and Alameda filed for bankruptcy in 2022.
Salame was charged with conspiracy to make unlawful political contributions and defraud the Federal Election Commission the following year. 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, 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. This sentencing has set a precedent for the severity of legal consequences in cases related to financial misconduct and fraudulent activities within the crypto sector.
