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  • Writer's pictureThe San Juan Daily Star

Top FTX executive sentenced to 7 1/2 years in prison

By David Yaffe-Bellany

Ryan Salame, a top executive at collapsed cryptocurrency exchange FTX, was sentenced to 7 1/2 years in prison earlier this week, making him the first of Sam Bankman-Fried’s circle of advisers at FTX to receive prison time.

Salame, 30, a trusted lieutenant of Bankman-Fried, the exchange’s founder, pleaded guilty last year to a campaign finance law violation and a charge of operating an unlicensed money transmitting business. He is one of four top deputies in the FTX empire who have pleaded guilty to crimes since the company imploded in November 2022.

Salame’s sentence exceeded the five to seven years that prosecutors had recommended. Defense lawyers had asked for 18 months.

Wearing a blue suit and socks emblazoned with the Bitcoin logo, Salame stood facing Judge Lewis A. Kaplan as the sentence was read aloud in U.S. District Court in Manhattan. Kaplan called Salame’s crimes “astonishing.”

“The state of our political life in this country is in jeopardy,” he said. “Efforts like that undertaken by Mr. Salame and Bankman-Fried only make matters worse.”

Salame is set to surrender Aug. 29. His lawyers requested that he serve his sentence at the federal prison in Cumberland, Maryland, near his home. Bankman-Fried is serving a 25-year sentence, after he was convicted of fraud and conspiracy at a trial last year.

Before FTX failed, Salame was a key figure at the exchange, overseeing its subsidiary in the Bahamas, where the company was based. As FTX grew into a $32 billion business, Salame spent lavishly. He enjoyed expensive cars and private jets, and bought restaurants in the Berkshires in Massachusetts. He was also a prolific political donor, giving more than $24 million in the 2022 midterm elections, mostly to Republicans.

When FTX imploded, Salame became a target of federal prosecutors, who searched his home in Maryland. Bankman-Fried was charged with stealing $8 billion from FTX’s customers and using the money to finance political contributions, venture investments and luxury real estate purchases. Three top FTX executives — Gary Wang, Nishad Singh and Caroline Ellison — pleaded guilty to financial crimes and agreed to cooperate with the government. They all await sentencing.

In September, Salame also pleaded guilty, admitting that he had acted as an illegal “straw donor” who made political contributions at the direction of Bankman-Fried to evade federal disclosure requirements. In a sentencing memo, prosecutors called it “one of the largest ever” campaign finance offenses in U.S. history.

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

In the memo, prosecutors argued that Salame had been motivated by a desire for money and influence. Even as FTX crumbled, he withdrew $5 million from the exchange, using the funds to pay off personal expenses and hire a public-relations firm. Hours before the bankruptcy, the prosecutors wrote, Salame withdrew another $600,000 from his account on FTX’s U.S. platform.

Kaplan invoked those withdrawals at the hearing Tuesday. “It was me first — I’m getting in the lifeboat first,” he said of Salame. “To heck with all those customers.”

In their own memo to Kaplan, Salame’s defense lawyers said he had not been aware that Bankman-Fried was stealing billions of dollars from customers. That news “was as shocking and dismaying to Ryan Salame as to everyone else in the world,” the lawyers wrote.

They said that Salame’s life had been “decimated” and that FTX’s demise had brought “shame and instability” to his family. Salame is in a long-term relationship with Michelle Bond, a former crypto industry lobbyist who also supported Bankman-Fried. In November, Bond gave birth to the couple’s first child, the memo said. Salame has also begun to grapple with a substance-abuse problem, his lawyers wrote, and is planning to attend law school.

Addressing the court Tuesday, Jason Linder, a lawyer for Salame, described his client as “merely a tool” of Bankman-Fried’s. Unlike Wang, Singh and Ellison, Salame did not testify against Bankman-Fried in court last year. But his lawyers said he had voluntarily produced documents and “offered assistance and cooperation” to the government as it prepared for the trial.

At Tuesday’s hearing, Linder pointed to rows filled with friends and family members who had accompanied Salame, including Bond and Salame’s mother and aunt.

Before the sentence was announced, Salame briefly addressed the court, apologizing to FTX’s customers and his family. “Mom, I can’t imagine how this feels for you,” he said, his voice breaking.

But Kaplan said a long sentence was necessary to send a message to wealthy people about “the consequences of perverting our electoral system and its rules.”

Salame “knowingly and willfully assisted in destroying the limited transparency that the laws of the United States provide in this area,” he said.

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