Former FTX Executive Sentenced to 7.5 Years for Fraud and Unlicensed Business Operations

In this post:

  • Former FTX co-CEO Ryan Salame sentenced to 7.5 years for financial crimes.
  • Salame facilitated over $100 million in illegal political donations.
  • He is expected to pay $12 million in penalties and forfeit assets.

Former FTX Digital Markets CFT Co-CEO Ryan Salame has been sentenced to 7.5 years in prison. This sentencing took place during a court session on May 28 in the U. S. District Court for the Southern District of New York by Judge Lewis Kaplan.

Also Read: U.S. Prosecutor: FTX Bankruptcy Lawyers Did Not Conspire With the Exchange

Salame admitted to charges related to conspiracy to engage in the business of transmitting money without a license and conspiracy to commit fraud related to campaign funds. These charges were initially acknowledged in September 2023.

U.S. Attorney Accuses Salame of Using Unlawful Campaigns and Financial Activities

According to statements by U. S. Attorney Damian Williams, Salame used unlawful political campaigns and unlicensed financial activities to serve the interests of FTX and Alameda Research. It was previously stated that these actions helped FTX’s growth due to the company’s avoidance of legal processes.

U.S. Attorney Damian Williams said:

“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.”

Also Read: How Wall Street scored big in the FTX bankruptcy mess

Salame wrote to the Securities Commission of the Bahamas on November 9, 2022, when Sam Bankman-Fried (SBF) was still the FTX CEO, oblivious of the fact he would resign and the exchange would declare bankruptcy a day later. After this, Bankman-Fried fled to Abu Dhabi and was subsequently extradited to the U. S., where he was convicted of seven felony charges and then sentenced to 25 years of imprisonment in March.

Prosecutors suggested that Salame be sentenced to up to seven years for his crimes, which involved laundering FTX user funds and campaign finance fraud. But the defense counsel urged for an 18-month term, stating that he was only a participant on a minimal level in the above conspiracies and has low risk to rearrest.

Salame Facilitated $100 Million in Political Donations

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.

The legal status of previous FTX Executives

Salame is the second executive of FTX and Alameda Research to be jailed after Bankman-Fried, the founder of the now bankrupt exchange. Others, including former Alameda CEO Caroline Ellison, former FTX engineering director Nishad Singh, and FTX’s co-founder Gary Wang have pleaded guilty and testified during Bankman-Fried’s trial. It is important to note that at the time of writing this report, the dates for their sentencing have not been set.

In his plea agreement, about $12 million in penalties must be paid to the U. S. government and other FTX debtors. He is also to provide two pieces of land and a business as surety. His legal counsel stated that he would be left with no properties or cash after forfeiture, although he was worth millions in the year 2022. An affidavit accompanying a motion filed in court on May 27 indicated that Salame might retain his 2021 Porsche because there was not enough equity for its forfeiture.

Cryptopolitan reporting by Damilola Lawrence

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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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