NEW YORK — A federal judge on Tuesday sentenced former FTX executive Ryan Salame to more than seven years in prison, the first of the lieutenants of failed cryptocurrency mogul Sam Bankman-Fried to receive jail time for their roles in the 2022 collapse of the cryptocurrency exchange.
Salame, 30, was a high-ranking executive at FTX for most of the exchange’s existence and, up until its collapse, was the co-CEO of FTX Digital Markets. He pleaded guilty last year to illegally making unlawful U.S. campaign contributions and to operating an unlicensed money-transmitting business.
The sentence of 7 1/2 years in prison, plus three years of supervised release, was more than the five to seven years prosecutors had asked Judge Lewis A. Kaplan to impose on Salame in their pre-sentencing memo.
While Salame was a high-level 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 bid for leniency, Salame said during the sentencing hearing that he cooperated and even provided documents that aided 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 ultimately led to the exchange’s failure, Salame was used as a conduit for Bankman-Fried to make illegal campaign contributions to help shape U.S. policy on cryptocurrencies. On the surface, Bankman-Fried mostly gave political contributions to Democrats and liberal-leaning causes, while Salame gave contributions to Republicans and right-leaning causes.
But ultimately the funds that Salame used for those contributions came from Bankman-Fried.
Kaplan said Salame “knew precisely what he was doing … and the whole idea was to hide it from the world. Astonishing!”
The judge also chastised Salame for pulling $5 million in cryptocurrencies out of FTX as the exchange was failing.
“You tried to withdraw tens of millions more,” Kaplan said. “It was me first. I’m getting in the lifeboat first. To heck with all those customers.”
Salame apologized to FTX customers and his family, saying that he and others had good intentions, though he added: “I fully understand that the means I sought to achieve these goals were illegal.”
Before he was sentenced, Salame gave brief remarks saying he was “beginning my path to redemption.”
“I accept what’s next,” he said.
Three other high-level executives at FTX are awaiting sentencing for their roles in the exchange’s collapse: Caroline Ellison, who was CEO of the FTX hedge fund Alameda Research, Gary Wang, the co-founder of FTX, and Nishad Singh, FTX’s head of engineering. All three cooperated with prosecutors and testified at trial against Bankman-Fried in exchange for potentially suspended prison sentences.
_____
Associated Press writer Larry Neumeister in New York contributed to this report.
Ryan Salame, a prominent member of the FTX crypto exchange ‘inner circle,’ has recently been sentenced to prison for his involvement in a high-profile cryptocurrency fraud case. Salame, who was once considered a rising star in the world of digital assets, now faces a lengthy prison term for his role in defrauding investors out of millions of dollars.
Salame’s fall from grace has sent shockwaves through the cryptocurrency community, as many had looked up to him as a leader and innovator in the industry. His involvement in the fraud scheme has tarnished his reputation and raised questions about the integrity of the FTX exchange, which has been touted as one of the most reputable platforms in the crypto space.
The details of Salame’s crimes are still emerging, but it is believed that he used his position within the FTX ‘inner circle’ to manipulate prices and deceive investors into making risky investments. This type of insider trading is illegal and unethical, and Salame’s actions have had far-reaching consequences for both the victims of the fraud and the broader cryptocurrency market.
In light of Salame’s conviction, many are calling for increased regulation and oversight of the cryptocurrency industry to prevent similar incidents from occurring in the future. The lack of transparency and accountability in the digital asset space has long been a concern for regulators and investors alike, and cases like Salame’s only serve to highlight the need for stronger safeguards against fraud and manipulation.
As the cryptocurrency market continues to grow and evolve, it is crucial that industry participants act with integrity and uphold the highest standards of professionalism. The actions of individuals like Ryan Salame not only damage their own reputations, but also erode trust in the entire ecosystem. It is up to all stakeholders in the crypto space to work together to ensure that bad actors are held accountable and that investors are protected from fraudulent schemes.
In conclusion, the sentencing of Ryan Salame serves as a stark reminder of the risks and challenges facing the cryptocurrency industry. While digital assets offer tremendous opportunities for innovation and growth, they also present unique challenges in terms of security and regulation. It is incumbent upon all participants in the crypto space to act responsibly and ethically in order to build a sustainable and trustworthy ecosystem for investors and users alike.
