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A federal judge on Tuesday sentenced former FTX CEO Ryan Salame to more than seven years in prison, the first of the failed cryptocurrency tycoon’s lieutenants Sam Bankman-Fried get jail time for their role in the 2022 cryptocurrency exchange crash.
Salameh, 30, was a high-ranking executive at FTX for most of the exchange’s existence and until its collapse was co-CEO of FTX Digital Markets. He pleaded guilty last year to making illegal campaign contributions in the US and operating an unlicensed money transfer business.
The sentence of seven and a half years in prison, plus three years of supervised release, was more than the five to seven years prosecutors had asked Judge Louis A. Kaplan to impose on Salameh in his pre-sentencing memo.
Although Salameh was a high-ranking executive at FTX, he was not a major part of the government’s case against Bankman-Fried at his trial earlier this year and did not testify against him. In a plea for leniency, Salameh said during the sentencing hearing that he cooperated and even provided documents that helped prosecutors in their cross-examination of Bankman-Fried, as well as in his own prosecution.
Along with helping Bankman-Fried hide the holes in FTX’s balance sheet that eventually led to the stock’s bankruptcy, Salame was used as a conduit for Bankman-Fried to make illegal campaign contributions to help shape US policy about cryptocurrencies. At first glance, Bankman-Fried gives political donations to Democrats and liberal-leaning causes, while Salameh gives to Republicans and right-wing causes.
But in the end, the funds Salame used for these contributions came from Bankman-Fried.
Kaplan said Salame “knew exactly what he was doing … and the whole idea was to hide it from the world. Amazing!”
The judge also fined Salameh for withdrawing $5 million in cryptocurrency from FTX as the exchange was failing.
“You tried to withdraw tens of millions more,” Kaplan said. “It was, ‘Me first.’ I get into the lifeboat first. To mess with all these customers.”
Salameh apologized to FTX clients and his family, saying he and others had good intentions, but added: “I fully understand that the means I sought to achieve these goals were illegal.”
Before he was sentenced, Salameh made brief remarks, saying he was “beginning my road to redemption.”
“I accept what follows,” he said.
Three other high-ranking FTX executives are awaiting sentencing for their roles in the stock market crash: Caroline Ellison, who was chief executive of FTX hedge fund Alameda Research; Gary Wang, the co-founder of FTX; and Nishad Singh, head of engineering at FTX. All three cooperated with prosecutors and testified at Bankman-Fried’s trial in exchange for possible suspended prison sentences.
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