May 29, 2024

Ryan Salame, of FTX's notorious 'inner circle' member, sentenced to prison

On Tuesday, a federal judge handed down a prison sentence of over seven years to Ryan Salame, the first lieutenant of defunct cryptocurrency magnate Sam Bankman-Fried to be penalized for his part in the collapse of the FTX exchange in 2022.

Before the exchange went under, Salame, who was 30 years old at the time, was a senior executive at FTX and co-CEO of FTX Digital Markets, as The Associated Press reported.

Last year, he entered a guilty plea for running an unregistered money-transmitting firm and for unlawfully contributing to U.S. campaigns.

The Sentencing

Compared to the five to seven years that Salame's prosecutors had requested in their pre-sentencing memo, Judge Lewis A. Kaplan's sentence of seven and a half years in prison plus three years of supervised release seen by some as excessive.

Salame was a senior executive at FTX, but he did not testify against Bankman-Fried or play a significant role in the prosecution's case against him during his trial earlier this year.

Salame begged for mercy at his sentencing hearing by saying he helped prosecutors with both Bankman-Fried's cross-examination and his own prosecution by cooperating and providing documents.

In addition to concealing the weaknesses in FTX's financial statements that contributed to the exchange's demise, Bankman-Fried utilized Salame to launder unlawful campaign contributions in order to influence U.S. policy regarding cryptocurrency.

Favor for Democrats

Bankman-Fried seemed to favor Democrats and liberal causes with her political donations, whilst Salame leaned more toward Republicans and conservative groups.

However, Salame was able to make such contributions with the help of money that came from Bankman-Fried.

Salame "knew precisely what he was doing...," according to Kaplan. the plan all along was to keep it a secret. Astonishing!”

Scheming Removal

Salame was also scolded by the court for removing $5 million worth of cryptocurrency from FTX while the exchange was collapsing.

“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.”

Plea for Mercy

Before he was sentenced, Salame gave brief remarks saying he was “beginning my path to redemption" and that he was ready to "accept what’s next,” he said.

Three further senior FTX officials—Nishad Singh, head of engineering for FTX, co-founder Gary Wang, and Caroline Ellison, CEO of FTX hedge fund Alameda Research—are awaiting imprisonment for their responsibilities in the collapse of the exchange. In return for what may have been suspended jail terms, all three of them collaborated with the prosecution and testified against Bankman-Fried during the trial.

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