Ryan Salame, part of the ‘inner circle’ at collapsed crypto exchange FTX, sentenced to prison

Hey there, time traveller!
This article was published 28/05/2024 (557 days ago), so information in it may no longer be current.

NEW YORK (AP) — A federal judge on Tuesday sentenced former FTX executive Ryan Salame to more than seven years in prison, the first of the lieutenants of failed cryptocurrency mogul Sam Bankman-Fried to receive jail time for their roles in the 2022 collapse of the cryptocurrency exchange.

Salame, 30, was a high-ranking executive at FTX for most of the exchange’s existence and, up until its collapse, was the co-CEO of FTX Digital Markets. He pleaded guilty last year to illegally making unlawful U.S. campaign contributions and to operating an unlicensed money-transmitting business.

The sentence of 7 1/2 years in prison, plus three years of supervised release, was more than the five to seven years prosecutors had asked Judge Lewis A. Kaplan to impose on Salame in their pre-sentencing memo.

While Salame was a high-level executive at FTX, he was not a major part of the government’s case against Bankman-Fried at his trial earlier this year and did not testify against him. In a bid for leniency, Salame said during the sentencing hearing that he cooperated and even provided documents that aided prosecutors in their cross examination of Bankman-Fried, as well as in his own prosecution.

Along with helping Bankman-Fried hide the holes in FTX’s balance sheet that ultimately led to the exchange’s failure, Salame was used as a conduit for Bankman-Fried to make illegal campaign contributions to help shape U.S. policy on cryptocurrencies. On the surface, Bankman-Fried mostly gave political contributions to Democrats and liberal-leaning causes, while Salame gave contributions to Republicans and right-leaning causes.

But ultimately the funds that Salame used for those contributions came from Bankman-Fried.

Kaplan said Salame “knew precisely what he was doing … and the whole idea was to hide it from the world. Astonishing!”

The judge also chastised Salame for pulling $5 million in cryptocurrencies out of FTX as the exchange was failing.

“You tried to withdraw tens of millions more,” Kaplan said. “It was me first. I’m getting in the lifeboat first. To heck with all those customers.”

Salame apologized to FTX customers and his family, saying that he and others had good intentions, though he added: “I fully understand that the means I sought to achieve these goals were illegal.”

Before he was sentenced, Salame gave brief remarks saying he was “beginning my path to redemption.”

“I accept what’s next,” he said.

Three other high-level executives at FTX are awaiting sentencing for their roles in the exchange’s collapse: Caroline Ellison, who was CEO of the FTX hedge fund Alameda Research, Gary Wang, the co-founder of FTX, and Nishad Singh, FTX’s head of engineering. All three cooperated with prosecutors and testified at trial against Bankman-Fried in exchange for potentially suspended prison sentences.

_____

Associated Press writer Larry Neumeister in New York contributed to this report.