FTX CEO jailed over connections to failed cryptocurrency empire

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A top executive at FTX has been jailed over his connections to the collapsed cryptocurrency exchange, making him the first of founder Sam Bankman-Fried’s inner circle to also end up behind bars.

Ryan Salame, 30, was sentenced Tuesday to seven and a half years in prison after pleading guilty last year to a campaign finance law violation and a charge of operating an unlicensed money transmission business.

He was one of four top deputies in the FTX empire to have pleaded guilty to crimes since the company collapsed in November 2022.

Salame’s sentence exceeded the five to seven years prosecutors recommended, according to prosecutors The New York Times. Defense lawyers had asked for an 18-month prison sentence.

Before the company’s collapse, Salame was a key figure in the stock market and one of Bankman-Fried’s top executives, overseeing the subsidiary in the Bahamas where the company was based.

Like other top FTX executives, Salame enjoyed expensive cars and private jets, and bought restaurants in the Berkshires of Massachusetts. According to The times he also donated more than $24 million in the 2022 midterm elections, mostly to Republican candidates.

In September 2023, Salame admitted that he had acted as an illegal “straw donor” at Bankman-Fried’s direction to evade federal disclosure requirements. A “straw donor” is someone who uses someone else’s money to make a political contribution under their own name.

In a sentencing memo to Judge Lewis A. Kaplan, prosecutors called it “one of the largest ever campaign finance crimes” in American history. The times reported.

As part of his plea deal, Salame agreed to pay a $6 million fine and more than $5 million in restitution, and forfeit two properties in Massachusetts as well as his Porsche. desire for money and influence.

Three other top FTX officials – Gary Wang, Nishad Singh and Caroline Ellison – also pleaded guilty to financial crimes and agreed to cooperate with the government. They are all awaiting sentencing.

Bankman-Fried was sentenced to 25 years behind bars in March after being found guilty of two counts of fraud and five counts of conspiracy. In addition to his prison sentence, he was ordered to forfeit $11.2 billion.

In their own memo to Judge Kaplan, Salame’s attorneys said Tuesday that he was unaware that Bankman-Fried was stealing billions of dollars from clients. The news “was as shocking and appalling to Ryan Salame as it is to anyone in the world,” the lawyers wrote. The times.

Salame’s life was “decimated in almost every way imaginable,” and FTX’s death brought “shame and instability” to his family, attorneys wrote.

At its peak, FTX was worth $32 billion and had a million users. Bankman-Fried was considered something of an anomaly in the world of crypto, both because of his age, 32, and his intention to use his wealth for altruistic purposes.

The empire collapsed in November 2022 when a Coin Bureau The report found that most of FTX’s assets were owned by a quantitative trading firm also run by Bankman-Fried called Alameda Research.

The revelation sent investors and customers scrambling to withdraw their money, later exposing an $8 billion hole in the company. Just as quickly as FTX grew, it fell and essentially went bankrupt overnight.

Bankman-Fried was previously criticized by Judge Kaplan, who also presided over the FTX founder’s sentencing, for putting on a “performance” to make himself appear more sympathetic.

“When he wasn’t lying, he was evasive and hair-splitting, trying to get prosecutors to rephrase the questions for him,” Judge Kaplan said. said. “I have been doing this work for almost thirty years. I’ve never seen a performance like that.”

Once known as the ‘King of Crypto’, Bankman-Fried became a billionaire, appearing on magazine covers and making lucrative deals with celebrities to promote his business.