Former FTX Executive Ryan Salame Sentenced to 7.5 Years in Prison for Misappropriating Millions in Customer Funds to Donate to Both U.S. Political Parties Under SBF's Direction

The U.S. Department of Justice announced yesterday (29th) that Ryan Salame, former co-CEO of FTX's Bahamas subsidiary FTX Digital Markets Ltd, has been sentenced to 7.5 years in prison and three years of probation. This marks the first sentencing of a Sam Bankman-Fried (SBF) associate since the FTX exchange declared bankruptcy in November 2022.

Source: justice.gov

At 30 years old, Salame reached a plea agreement with U.S. prosecutors last September, admitting to using Alameda funds under SBF's direction to make millions of dollars in illegal political donations to both U.S. parties in his own name, defrauding the Federal Election Commission, and conspiring to operate an unlicensed money transmission business. He is one of four FTX executives who turned state's evidence and pled guilty. SBF, meanwhile, was sentenced to a hefty 25-year prison term at the end of March and had over $11 billion in assets forfeited. His lawyers are currently preparing an appeal.

FTX Executive Receives 7.5-Year Sentence

The New York Times reported that Salame's sentence exceeded the 5-7 years prosecutors had sought and far surpassed the 18 months requested by his defense attorneys, reflecting Judge Lewis A. Kaplan's stern stance. In delivering the sentence, Judge Kaplan described the crimes as "shocking," emphasizing the necessity of a long prison term to convey the consequences of distorting the U.S. election system and its regulations to the wealthy.

On Tuesday, Damian Williams, U.S. Attorney for the Southern District of New York, stated in a Department of Justice press release:

"Ryan Salame agreed to advance the interests of FTX, Alameda Research, and their co-conspirators through illegal political influence and unlicensed money transmission operations. This facilitated FTX's rapid and large-scale operations abroad. The defendant's participation in these serious federal crimes eroded public trust in the integrity of the U.S. electoral and financial systems. Today's sentencing underscores the severe repercussions of such offenses."

Defense Claims Unawareness of SBF Core Group's Misappropriation of FTX Customer Billions

According to Coindesk, Salame's defense attorneys at a May sentencing hearing requested leniency from the judge, arguing for an 18-month sentence by claiming Salame was not involved in the core fraudulent activities committed by SBF's group. They highlighted Salame's cooperation with authorities, genuine remorse, and significant personal and financial losses due to the exchange's collapse.

"He was completely unaware of the scheme to lie and steal from customers orchestrated by the four central figures at Alameda and FTX. Ryan did not steal from anyone or lie to customers;

he was deceived. When he finally understood the fraud at FTX, he was the first to report it to Bahamian authorities."

However, prosecutors criticized Salame in a court memorandum, noting that after FTX's collapse, he withdrew $5 million from the exchange to cover personal expenses and hire a PR firm. Additionally, hours before FTX declared bankruptcy, he withdrew $600,000 from his account on the FTX U.S. platform, demonstrating his criminal motivation for financial gain and to expand his influence.

Last year, upon pleading guilty, Salame was ordered to forfeit over $1.5 billion in assets, agreed to pay $5.5 million to FTX creditors, and pay $6 million in fines to the government. He will also surrender two properties in Massachusetts and his Porsche luxury car.