Former FTX executive Ryan Salame pleaded guilty to criminal charges stemming from the collapse of the cryptocurrency exchange.
Salame, who was the co-chief executive of FTX’s Bahamas subsidiary before the exchange imploded last November, appeared in Manhattan federal court on Thursday afternoon. Flanked by lawyers and wearing a blue suit and Bitcoin socks, Salame pleaded guilty to one campaign finance violation and one charge of operating an illegal money-transmitting business.
Salame’s plea agreement did not include a promise to testify against Sam Bankman-Fried, who goes on trial for fraud next month, but the deal will likely increase the pressure on the FTX co-founder. Prosecutors claim Bankman-Fried orchestrated a yearslong scheme to misuse FTX customer funds for personal expenses, high-risk bets through affiliated hedge fund Alameda Research and political donations meant to influence US crypto regulation before the exchange’s collapse. Bankman-Fried has pleaded not guilty.
Three of Bankman-Fried’s other close associates — Alameda Chief Executive Officer Caroline Ellison, FTX co-founder Gary Wang and engineering chief Nishad Singh all previously pleaded guilty and agreed to testify in the hopes of receiving lighter sentences.
Read More: Ex-FTX Executive Salame Talking to Prosecutors About Plea Deal
Each of the counts to which Salame, 30, pleaded guilty carries a maximum sentence of five years in prison. Though Salame agreed to a $1.55 billion forfeiture order — dwarfing even the $700 million prosecutors are seeking from Bankman-Fried — the government said it would pursue that amount only if Salame lied or failed to surrender a much smaller amount in assets, including $6 million in cash and a Porsche 911 Turbo.
Salame, who joined Alameda in 2019, was a member of Bankman-Fried’s inner-circle and a prolific political donor, spending $24 million in support of Republican campaigns. Prosecutors allege Bankman-Fried, 31, used Salame and other executives as straw donors. On Thursday, Salame admitted that he made donations in 2021 and 2022 using money from Alameda accounts.
“At the time I knew it was prohibited by campaign finance laws to make contributions in my name with money that wasn’t my own,” Salame said in court. He added that, though the funds were categorized as loans,“I never intended to repay them.”
He said his political donations were supported by Bankman-Fried.
While prosecutors withdrew a campaign finance law charge against Bankman-Fried earlier this year, the government has incorporated the alleged political donations scheme into other counts in the case.
A spokesman for Bankman-Fried declined to comment.
Berkshires Restaurants
Manhattan US Attorney Damian Williams said in a statement that Salame’s actions “helped FTX grow faster and larger by operating outside of the law” and that his guilty plea reflected the government’s commitment to “pursue swift justice against individuals at FTX.”
After the hearing, Salame was freed on a $1 million bond. He’s scheduled to be sentenced on March 6.
The illegal money-transmitting charge against Salame related to efforts to open a bank account to accept FTX customer funds under false pretenses. According to the charging documents, Salame, Bankman-Fried and Alameda employees falsely claimed the account would be used for trading to avoid having to register FTX as a money services business.
In addition to his political donations, Salame was known for his investments in restaurants. In 2019, he paid more than $6 million for five eateries in Lenox, Massachusetts, in the Berkshires. As part of his plea, Salame agreed to surrender two properties in Lenox and his interest in the East Rood Farm Corp., a company that holds some of his restaurants.
The case is US v. Bankman-Fried, 22 cr 673, US District Court, Southern District of New York (Manhattan).
--With assistance from Yueqi Yang.
(Updates with details on forfeiture and potential penalty.)
Author: Ava Benny-Morrison and Chris Dolmetsch