A federal judge on Tuesday sentenced former FTX executive Ryan Salame to more than seven years in prison, the first of failed cryptocurrency magnate Sam Bankman-Fried’s lieutenants to receive prison time for their role in the collapse of the exchange. cryptocurrencies in 2022.
Salame, 30, was a senior executive at FTX for most of the exchange’s existence and, until its collapse, was the co-CEO of FTX Digital Markets. He pleaded guilty last year to making illegal contributions to the U.S. campaign and operating a money transmitting business without a license.
The sentence of seven and a half years in prison, plus three years of supervised release, was more than the five to seven years that prosecutors had asked Judge Lewis A Kaplan to impose on Salame in his 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 an attempt to gain leniency, Salame said during the sentencing hearing that he cooperated and even provided documents that assisted prosecutors in their cross-examination of Bankman-Fried, as well as in their own prosecution of him.
In addition to 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 US policy on cryptocurrencies. At first glance, Bankman-Fried made political contributions primarily to Democrats and liberal-leaning causes, while Salame made contributions to Republicans and right-leaning causes.
But ultimately, the funds Salame used for those contributions came from Bankman-Fried.
Kaplan said Salame “knew exactly what he was doing…and the idea was to hide it from the world. Amazing!”
The judge also reprimanded Salame for withdrawing $5 million in cryptocurrency from FTX when the exchange was failing.
“Tens of millions more were attempted to be withdrawn,” Kaplan said. “It was: ‘Me first. I’ll get into the lifeboat first. To hell with all those customers.”
Salame apologized to FTX clients and his family, saying he and others had good intentions, although he added: “I fully understand that the means I sought to achieve these goals were illegal.”
Before being sentenced, Salame made brief comments saying he was “beginning my path to redemption.”
“I accept what follows,” he said.
Three other high-level FTX executives are awaiting sentencing for their role in the exchange’s collapse: Caroline Ellison, who was CEO of the FTX hedge fund Alameda Research; Gary Wang, 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 potentially suspended prison sentences.