The former co-CEO of FTX’s Bahamian subsidiary has been sentenced to 90 months in prison for his role in the cryptocurrency exchange’s 2022 collapse, U.S. federal prosecutors announced on May 28.
Ryan Salame, 30, served as a high-ranking executive at the FTX hedge fund Alameda Research and, up until its collapse, was the co-CEO of FTX Digital Markets, which operated in the Bahamas.
Mr. Salame was also ordered to pay more than $6 million in forfeiture and more than $5 million in restitution, the DOJ stated.
Mr. Salame pleaded guilty in September 2023 to conspiring to make unlawful political contributions, defrauding the Federal Election Commission, and operating an unlicensed money-transmitting business.
Prosecutors alleged that the former FTX senior executive conspired with Sam Bankman-Fried and other employees of FTX and Alameda Research to unlawfully transmit customer funds without a license.
FTX Used Customer Funds for Donations
Prosecutors further alleged that Mr. Salame—along with founder Mr. Bankman-Fried and former FTX head of engineering Nishad Singh—used tens of millions of dollars in FTX customer funds to make donations to both Democrat and Republican candidates and campaign committees to “improve Bankman-Fried’s personal standing in Washington, D.C., increase FTX’s profile, and curry favor with candidates that could help pass legislation favorable to FTX, Alameda, or Bankman-Fried’s personal agenda.”Those campaign donations, which prosecutors said amounted to “tens of millions of dollars,” were made in a manner that “obscured” Mr. Bankman-Fried’s association with them, the DOJ further alleged.
The May 28 sentencing was far more than prosecutors had asked Judge Kaplan to impose on Mr. Salame in their pre-sentencing memo.
“Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law,” U.S. Attorney Damian Williams said in a statement on May 28.
Bankman-Fried Sentenced to 25 Years in Prison
In March, Mr. Bankman-Fried was sentenced by Judge Kaplan to 25 years in prison for defrauding investors of $8 billion via the failed exchange, once valued at $32 billion after raising $400 million from investors.He was also ordered to pay $11.2 billion in forfeiture.
At the time of his sentencing, Judge Kaplan stated that FTX customers lost $8 billion, FTX equity investors lost $1.7 billion, and lenders to the Alameda Research hedge fund founded by Mr. Bankman-Fried lost $1.3 billion.
That sentencing came after a jury convicted the FTX founder in November 2023 of all seven counts of conspiracy and fraud stemming from its collapse.
Before his conviction, Mr. Bankman-Fried had argued that FTX customers did not lose money during the fall of the exchange and that he did not intentionally do anything wrong.
The former crypto billionaire also attempted to pin the blame on employees at the company who he claimed had acted without his knowledge and had made costly mistakes.
Three other senior-level executives at FTX are still awaiting sentencing for their alleged roles in the collapse of the cryptocurrency exchange: Mr. Singh; Caroline Ellison, former CEO of the FTX hedge fund Alameda Research; and Gary Wang, co-founder of FTX.
All three have cooperated with prosecutors and testified at trial against Mr. Bankman-Fried in exchange for potentially suspended prison sentences.
