Ryan Salame, former co-chief executive officer of FTX Digital Markets Ltd., leaves federal court in New York, U.S., Tuesday, May 28, 2024.
Yuki Iwamura | Bloomberg | Getty Images
Ryan Salame, former lieutenant of FTX founder Sam Bankman-Fried, was sentenced to 90 months, or seven and a half years, in prison, followed by three years of supervised release. Salame was also ordered to pay more than $6 million in forfeiture and more than $5 million in restitution.
The sentence is harsher than the five to seven years suggested by prosecutors and well beyond the 18 months requested by Salamé’s defense.
In September, Salame pleaded guilty to conspiracy to make illegal political contributions, defrauding the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business.
Judge Lewis Kaplan sentenced Sam Bankman-Fried to 25 years in prison in March.
In 2021, Salame rose from a high-ranking position at Bankman-Fried’s crypto hedge fund, Alameda Research, to co-CEO of FTX’s Bahamian subsidiary, FTX Digital Markets. Salamé spent millions on real estate and campaign donations during his term.
An estimate by Bahamian lawyers claims that Bankman-Fried and Salame spent $256.3 million to purchase and maintain 35 properties in New Providence – real estate that Bahamian regulators wanted back as part of the protection proceedings. the bankruptcy of FTX in the United States. Meanwhile, Federal Election Commission data shows Salame has donated more than $24 million to Republican candidates and causes in the 2022 election cycle.
Ryan Salame, the former co-chief executive of FTX Digital Markets, leaves Federal Court after pleading guilty to two charges, including conspiracy to make illegal political contributions in the United States, in New York, on September 7, 2023.
Brendan McDermid | Reuters
Days before FTX filed for bankruptcy in 2022, Salame went to Bahamian authorities to tell them that Bankman-Fried may have committed fraud by sending customers’ money from the crypto exchange to his other company, Alameda Research. According to a criminal filing, Salame revealed “possible mismanagement of client assets” by Bankman-Fried.
It was one of the first public acknowledgments of an insider going after Bankman-Fried, who was convicted of stealing more than $8 billion in cash from customers they said , were stored securely on the exchange.
Since then, however, several other insiders, including former Alameda CEO and SBF ex-girlfriend Caroline Ellison, FTX co-founder Gary Wang and former FTX director of engineering Nishad Singh, all testified for the prosecution which ultimately contributed to his guilt. verdict in November. Salame did not take the stand during Bankman-Fried’s trial.
In a statement, U.S. Attorney Damian Williams said Tuesday’s sentence underscores “the substantial consequences of such offenses.”
“Salame’s involvement in two serious federal crimes undermined public confidence in U.S. elections and the integrity of the financial system,” Williams added.
Former state and federal prosecutor Mark Bini told CNBC that the sentence underscored that the judge viewed the fraud at FTX, including the multimillion-dollar campaign finance scheme in which Salame was directly involved, as extremely severe.
“While Salamé’s attorney sought to argue that his production of documents to the government demonstrated his cooperation and contrition, it is clear that Judge Kaplan did not see it that way,” Bini said.
Salame is the first member of the SBF management team to be sentenced since the stock exchange filed for bankruptcy in November 2022.
— CNBC’s Dan Mangan contributed to this report.
cnbc
