FTX Digital Markets co-CEO Ryan Salame is a familiar face on the Long Island campaign trail with girlfriend Michelle Bond, a New York Republican running for Congress.

He’s also funding a super PAC that has spent more than $100,000 to boost her campaign.

In other words, Salame is straddling the line between super PAC backer and campaign confidant. But he has not violated any Federal Election Commission laws, according to campaign finance experts.

Super PACs can raise unlimited amounts of money in support of candidates but are not allowed to donate directly to candidates or coordinate with campaigns. Salame's actions are not necessarily out of step with the way that such organizations commonly operate. But they underscore how crypto’s growing influence in American politics is creating a new gray area for campaigns. Bond herself is a crypto policy advocate.

As Washington regulators are poised to crack down amid the recent market crash, crypto lobbying has grown significantly in 2022 and industry players are spending serious cash to sway the midterms.

These donations serve as a window into the mysterious network of crypto-linked PACs, which have spent money in dozens of midterm races — but aren’t exactly forthcoming about who is calling the shots.

Following the money

Salame has spent millions of his own money on political donations in the 2022 election cycle. According to FEC data, he has given $1.5 million to GMI PAC, an organization that Salame launched with other industry leaders. The political action committee does not spend directly to boost political candidates; instead, it donates to other crypto-focused super PACs.

But in this case, at least some of that money appears to have been funneled into Bond’s race. GMI PAC has given $1.1 million to Crypto Innovation PAC since 2021, FEC reports show. In turn, Crypto Innovation PAC has spent $115,000 on direct mail and text message ads to boost Bond’s campaign, according to the group’s campaign finance reports. Salame did not respond to a request for comment.

“Despite the fact that this isn't illegal, it is definitely the opposite of transparency to have this kind of shell game of money transfers,” said Saurav Ghosh, director of federal reform at Campaign Legal Center, a watchdog group in Washington, D.C. “We can't really say that he personally, you know, supported his girlfriend's campaign. But clearly his money was involved.”

Salame is one of many GMI PAC donors, and Crypto Innovation PAC supports many candidates. But his involvement with the Bond campaign was significant enough to raise alarm bells inside GMI PAC. It is illegal for political campaigns to coordinate with super PACs.

“GMI PAC consistently acts to preserve its independence and comply with federal campaign finance rules regarding coordination,” GMI PAC said in an email to The Block. “With regard to the election for the NY-1 House seat, the PAC took early steps to firewall off board member and donor Ryan Salame from any and all communications and decisions GMI PAC made related to that race.”

GMI PAC’s statement continued:

“Through written notification to the PAC board regarding this internal separation and the creation of separate internal communications channels, the PAC has acted to preserve its ability to make independent decisions regarding potential contributions or expenditures related to this election. Mr. Salame is not involved in any GMI PAC communications or decisions related to the NY-1 House seat. Furthermore, Mr Salame has no role or involvement with any third party organizations that GMI PAC has funded related to that election.”

GMI PAC would not say who oversees such decision-making. Crypto Innovation PAC, which is supporting Bond’s campaign through text message ads and direct mail to voters, did not respond to a request for comment and declined to share the content of the ads with The Block.

In fact, the general situation in which a group uses a network of super PACs to support candidates is quite common in US politics, said Andrew Mayersohn, committees researcher for OpenSecrets, a nonprofit that tracks political spending.

“There will be not just one super PAC, but a network of super PACs with similar donors or similar staff, or have the same goal in mind. And they shuffle money around between them,” Mayersohn said. “You do have to do a lot of digging to follow all the money when it sloshes around like this between multiple groups.”

Crypto crashes the primary

Bond is running in the GOP primary for a Long Island House seat. The candidate is a “strong supporter of President Trump’s America First mindset and policies,” according to her website.

She faces Republicans Anthony Figliola and Nick LaLota in the 1st Congressional District primary. Bond is the top fundraiser in the GOP primary field, fueled partially by her own wealth. She has given her campaign a combined $745,000 in loans and contributions, according to a recent filing.

The race has focused on economic issues, and it has turned nasty.

“Democrat Michelle Bond and her lobbyist friends are at it again. She’s using her crypto fortune to smear Navy Veteran Nick Lalota,” reads one anti-Bond text, which questions her conservative bona fides by incorrectly calling her a Democrat, sent to voters and shared with The Block.

For her part, Bond is not concerned about the appearance of a conflict of interest regarding the GMI PAC.

“Michelle, who was born and raised in the congressional district, has had a long and successful career in the business world. She is a smart, competent woman and has gained support for her candidacy from many corners. She has outraised her opponent, a career politician who doesn’t live in the district, by a two-to-one margin so far,” Bond campaign spokesperson Pat Ryan said in an email.

Salame does not have a formal role in the Bond campaign, according to Ryan. But since he and Bond are “longtime partners,” he is no stranger to the campaign’s social media. The FTX CEO has been featured on Bond’s “@michellebondNY1” Twitter account at least eight times since June.

In one instance, Salame’s image appeared in a fundraising appeal to mark Bond’s birthday. Salame also accompanied Bond to a political dinner with the former president’s son, Donald Trump Jr., according to her campaign Twitter account.

“It was great to be with our friends @DonaldJTrumpJr and @kimguilfoyle for dinner in my district #NY01 last night,” the tweet read. “We talked about what a disaster the career politicians have been for our economy, security, and families. Time for a change!”

Bond is perhaps the most crypto-savvy candidate running for Congress this year. She is the CEO of the Association for Digital Asset Markets and previously served as global head of policy for Blockchain in Washington, D.C. FTX is a member of the Association for Digital Asset Markets, according to the organization’s website. Bond has held roles at Bloomberg and the US Securities and Exchange Commission.

Bond owns between $100,000-$250,000 in bitcoin, according to a candidate financial disclosure filed on Monday. FTX Digital Markets paid Bond $200,000 for consulting this year, according to the disclosure, along with $200,000 the previous year. Bond has earned $250,000 from the Association for Digital Asset Markets this year, and $300,000 the previous year. Bond also reported investments in Multicoin Venture Fund III, among other assets.

The campaign brushed off questions about whether being linked to an FTX executive would influence her role in writing or voting on crypto regulations if elected to Congress. The campaign has “of course” taken steps to ensure Salame did not violate FEC rules with his PAC donations, Ryan said. Those steps included speaking with campaign finance lawyers to ensure the campaign is in compliance with rules and regulations, according to Ryan.

'Coordination' is narrowly defined

Though it is illegal for political campaigns to coordinate with super PACs, what constitutes “coordination” in this context can be difficult to define. Regulators use a three-part test to determine whether a campaign has coordinated with a super PAC, said FEC spokesperson Christian Hilland. (The commission also doesn’t weigh in on specific cases, he noted.)

“If a complaint comes before the FEC and we investigate, there needs to be some sort of evidence that either a representative from the candidate committee and an outside actor took part in creating and producing the communication together,” Hilland said.

Spouse-backed super PACs have stirred up controversy in the past. Former Rep. John Delaney filed an FEC complaint in 2016 which alleged that a PAC funded by his opponent’s husband broke the law, for example. But although coordinating on an independent expenditure is against the rules, just donating cash is not illegal.

As for Salame, his political spending extends far past GMI PAC. Salame has poured $15 million into his own American Dream Federal Action PAC, a group that is not focused specifically on crypto. He has given to several other organizations, including a $250,000 donation to VIEWPAC, which is focused on electing Republican women, in May. VIEWPAC endorsed Bond in July.

Salame told his hometown paper in March that he does not plan to run for office himself.

“I will say that I really like being involved as the second or third person instead of being the front face,” Salame told The Berkshire Eagle at the time. “I would love to get more involved with candidates that are excited about crypto. But I think where I shine is behind the scenes and in sort of the build out aspect of things.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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