The first of Sam Bankman-Fried’s associates to plead guilty to criminal charges has been sentenced to 7.5 years in prison.
This length exceeds the prosecutors’ request for Ryan Salame, a former FTX executive, to be imprisoned for five to seven years. Salame’s legal team pleaded for a much lighter sentence of no more than 18 months.
“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,” said U.S. Attorney Damian Williams. “Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system. Today’s sentence underscores the substantial consequences for such offenses.”
The main argument of Salame’s defense was that he was ‘duped’ like others by fraud at FTX and in his relationship with Bankman-Fried, per Bloomberg.
“He has been a good man who has done much good in this world, who conspired to commit two crimes while in the thrall of a criminal leader,” Salame’s attorneys wrote in their initial appeal.
Salame pleaded guilty to violating campaign finance laws and operating an unlicensed money-transmitting business. He also faced charges of conspiracy to make illegal political contributions.
Salame background
In 2019, Ryan Salame became a part of Alameda Research after connecting with Bankman-Fried at a blockchain conference. Alameda Research was FTX’s hedge fund, using its own technology and trading platform to trade thousands of digital assets, including major coins, NFTs, and altcoins. Salame also became the CEO of FTX’s Bahamas subsidiary.
In 2022, FTX crashed due to mismanagement of funds, lack of liquidity and the large volume of withdrawals. FTX filed for bankruptcy as it couldn’t handle all of its customer transactions due to ‘low liquidity.’
Furthermore, the exchange spent customer funds illegally and also illegally funded loans and projects of Alameda research. Prosecutors claim that Salame helped FTX accept customer deposits through a U.S. bank account without having the required licenses.
Additional proceedings
Earlier this year, as part of his plea deal, Salame agreed to forfeit nearly $6 million worth of assets, including a restaurant in Massachusetts.
In early May, reports surfaced indicating that FTX had accumulated billions more than necessary to cover customers’ potential losses. FTX’s estate also completed the sale of $2.6 billion worth of deeply discounted Solana tokens.
Other individuals in the scandal, including Caroline Ellison and Gary Wang, are still awaiting their sentences.
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