A U.S. federal judge has handed down a sentence of 7.5 years to Ryan Salame, ex-co-CEO of FTX Digital Markets, after Salame pleaded guilty to a pair of felony charges. The charges were related to the operation of an unlicensed money-transmitting business and involvement in campaign finance fraud. Salame is one of the first people with ties to FTX and Alameda Research to face incarceration.
The May 28 proceedings in the U.S. District Court for the Southern District of New York saw Judge Lewis Kaplan order Salame to serve his sentence. He had pleaded guilty to these charges in September 2023 and was awaiting his punishment. Salame had allegedly used an unregulated money-transmitting business and a deceptive political campaign to fuel the growth of FTX and Alameda Research beyond what the law allowed.
U.S. Attorney Damian Williams remarked that Salame’s participation in such grievous federal offences contradicted the public’s trust in the American election process and the financial system’s integrity. Williams noted that the severe punitive measures taken highlighted the potentially dire consequences of such behaviour.
Salame made the Securities Commission of the Bahamas aware of FTX’s fraudulent practices on November 9, 2022, two days before Sam Bankman-Fried, then CEO, resigned, and the firm filed for bankruptcy. Bankman-Fried was subsequently extradited from the Bahamas to the U.S, convicted on seven felony charges, and sentenced to 25 years by Judge Kaplan in March.
Salame’s lawyers contended that he deserved a lesser sentence of 18 months because he held a relatively minor role in the conspiracies he had admitted to and was unlikely to repeat such acts. Prosecutors, on the other hand, suggested a sentence of up to seven years due to Salame’s misuse of FTX user funds and fraudulently supporting his girlfriend Michelle Bond’s Congressional campaign.
After Bankman-Fried, Salame is the second individual linked to FTX and Alameda Research to be sentenced. Earlier, ex-CEO of Alameda, Caroline Ellison, ex-engineering director of FTX, Nishad Singh, and co-founder Gary Wang all pleaded guilty to charges and testified in Bankman-Fried’s criminal trial but their sentencing dates were unclear at the time of this reporting.
Since Salame’s guilty plea and release on a $1 million bond, he has been free to travel. Part of his agreement with the prosecutors stipulates he must pay roughly $6 million in fines to the U.S. government and a similar amount to FTX debtors. He must also forfeit ownership of two properties and a business.