Former FTX Executive Ryan Salame Sentenced to 7.5 Years in Prison

Ryan Salame, former co-CEO of FTX Digital Markets, has been sentenced to 7.5 years in prison. This sentencing occurred during a hearing on May 28 in the U.S. District Court for the Southern District of New York, presided over by Judge Lewis Kaplan. Salame pleaded guilty to conspiracy to operate an unlicensed money-transmitting business and engaging in campaign finance fraud. These charges were initially admitted in September 2023.

Prosecutors’ Statements and Legal Proceedings

U.S. Attorney Damian Williams stated that Salame advanced FTX and Alameda Research’s interests through unlawful political campaigns and unlicensed financial activities. These actions were said to have contributed to FTX’s growth by circumventing legal requirements. Salame reported fraudulent activities to the Securities Commission of the Bahamas on November 9, 2022, two days before Sam Bankman-Fried resigned and FTX declared bankruptcy. Following this, Bankman-Fried was extradited to the U.S. and faced conviction on seven felony counts, leading to a 25-year prison sentence in March.

Prosecutors recommended Salame serve up to seven years for his role in misusing FTX user funds and campaign finance fraud. However, his defense argued for an 18-month sentence, suggesting he played a minor role in the conspiracies and posed a low risk of reoffending.

Previous FTX Executives’ Legal Status

Salame is the second prominent figure from FTX and Alameda Research to be sentenced, following Bankman-Fried. Other executives, including former Alameda CEO Caroline Ellison, former FTX engineering director Nishad Singh, and FTX co-founder Gary Wang, have pleaded guilty and testified during Bankman-Fried’s trial. The dates for their sentencing were not established at the time of this report.

As part of his plea agreement, Salame must pay approximately $12 million in penalties, divided between the U.S. government and FTX debtors. He is also required to surrender two properties and a business. His legal team indicated that he would be left with no remaining assets post-forfeiture, despite having a net worth in the millions in 2022. A court filing on May 27 revealed that Salame might retain ownership of a 2021 Porsche due to insufficient equity for forfeiture.

Political Donations and Campaign Finance Fraud

Salame admitted to acting as a straw donor, facilitating over $100 million in political donations to help FTX gain political favor. These contributions were made to candidates from both major parties, funded by transfers from an Alameda subsidiary, and were categorized as loans, which Salame did not intend to repay. Prosecutors described this as one of the largest campaign finance violations in U.S. history, involving more than 300 individual donations. Salame met with senior politicians, including Senator Mitch McConnell and Congressman Kevin McCarthy, as part of these activities.

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