The former chief executive of FTX’s Bahamas subsidiary has ben ordered to spend 7 1/2 years in prison, the first of Sam Bankman-Fried’s close associates to be sentenced in the wake of the cryptocurrency exchange’s implosion.
Ryan Salame appeared in a Manhattan courtroom Tuesday, after reaching a plea deal with federal prosecutors in September, weeks before FTX founder Bankman-Fried was due to stand trial for stealing about $10 billion from customers, investors, and lenders.
The prison term is more than prosecutors had asked for. The government said Salame, who pleaded guilty to violating campaign finance laws and operating an unlicensed money transmitter, deserved five to seven years behind bars, compared to the 18 month or less the defense advocated for.
The sentence could indicate how tough Judge Lewis A. Kaplan is inclined to be with the former FTX executives who were by Bankman-Fried’s side as his crypto empire rose to dizzying heights before crashing in late 2022.
Salame’s lawyers have tried to distance the 30-year-old from the yearslong fraud that took place at the crypto exchange, arguing he was as shocked as anyone.
“And he was duped, as was everyone else, into believing that the companies were legitimate, solvent and wildly profitable,” his attorneys wrote in a memo filed in court ahead of sentencing.
Prosecutors and the defense have offered contrasting portrayals of the accountant turned crypto whiz, from someone who helped commit one of the largest campaign finance offenses in U.S. history to a low-key family man who raised money for charity in his spare time.
The government’s case against Bankman-Fried was supported by three key cooperating witnesses—former FTX cofounder Gary Wang, chief engineer Nishad Singh, and Alameda Research CEO Caroline Ellison. They all pleaded guilty to criminal charges and agreed to testify against Bankman-Fried with the hope of receiving lighter sentences. All three could face sentencing later this year.
Salame did not sign up as a cooperating witness, though his lawyers pointed to him being the first to tell Bahamian authorities about potential fraud at the exchange as it was collapsing. Salame also handed over more than 595,000 pages of documents to authorities investigating Bankman-Fried.
Salame joined Alameda Research, FTX’s sister hedge fund, after meeting Bankman-Fried at a blockchain conference in 2019. He rose through the ranks to become a top executive, overseeing FTX’s move from Asia to the Bahamas. Salame was FTX Digital Markets CEO when the FTX group filed for bankruptcy, exposing the mingling of customer funds to buy real estate, make investments and grow Bankman-Fried’s empire.
Since then, Salame has been raising his newborn son, seeking treatment for substance abuse, and preparing to forfeit $6 million, a business, and two properties in his hometown of Lenox, Mass., to the U.S. government, his lawyers said.
Bankman-Fried was sentenced in March to 25 years in prison, an outcome he is planning to appeal.
