Ryan Salame, the former co-chief executive of FTX Digital Markets, is in negotiations with federal prosecutors to plead guilty to criminal charges following the implosion of the cryptocurrency exchange, according to people familiar with the case.

The Republican megadonor may enter a plea as soon as next month to offenses including campaign finance law violations, according to the people, who asked not to be identified because the discussions aren’t public. It is unclear whether he will enter into a cooperation agreement with prosecutors and testify against FTX co-founder Sam Bankman-Fried.

Salame’s former colleagues, Gary Wang, Caroline Ellison and Nishad Singh, have already pleaded guilty to playing a role in the alleged multibillion dollar fraud at the now-bankrupt crypto empire and will be key witnesses in the government’s case against Bankman-Fried.

Salame’s attorney did not immediately return an email seeking comment. Salame has not previously been charged in connection with FTX and details of a potential plea deal have not been finalized.

Ratchets Pressure

A guilty plea from Salame, a Bankman-Fried lieutenant who helped fuel FTX’s political donation machine, would ratchet up pressure on the founder ahead of his upcoming trial in October.

Spokespeople for Bankman-Fried and the Manhattan US Attorney’s Office declined to comment. The 31-year-old Bankman-Fried has pleaded not guilty to all the charges against him.

Referring to the case as one of the largest financial frauds in American history, prosecutors accused Bankman-Fried of orchestrating a yearslong fraud at FTX and misusing billions in customer funds. The case against him is supported by many of his old friends and colleagues, some of whom formed his inner-circle at the exclusive enclave Albany in The Bahamas.

Salame, who headed the company’s Bahamas subsidiary, has been under intense scrutiny in the sweeping criminal and regulatory investigations. He was a prolific political donor, shelling out $24 million in support of Republican candidates during his time at FTX.

One recipient of the contributions was Salame’s girlfriend, Michelle Bond, who ran in a 2022 GOP primary for a New York congressional seat. Bond had been head of the crypto advocacy firm Association for Digital Asset Markets.

The campaign was unsuccessful but netted thousands in donations from Salame and other FTX figures, including former chief regulatory officer Daniel Friedberg, federal election commission data shows. Prosecutors later accused Bankman-Fried of using executives as straw donors to make huge contributions across both sides of the aisle in a bid to shape crypto policy in Washington D.C.

Campaign Finance Charges

Five of Bankman-Fried’s charges, to which he pleaded not guilty, have been separated from his fraud trial in October and postponed until next year. Prosecutors recently dropped one campaign finance charge entirely.

In a letter filed in federal court on Tuesday, prosecutors said the “illegal campaign finance scheme” would still form part of the government’s case against Bankman-Fried at his upcoming trial. A superseding indictment to be filed next week will clarify that the campaign finance donations were linked to the money laundering and fraud charges in the case.

In March, Federal Bureau of Investigation agents seized Bond’s and Salame’s phones from the home they shared in Potomac, Maryland. Salame’s attorney had previously spoken with prosecutors on his behalf, Bloomberg reported at the time.

Bond has not been accused of any wrongdoing in connection with the FTX scandal. Her lawyer, who also represents Salame, didn’t immediately return a message seeking comment.

Salame was one of several executives who received huge loans worth tens of millions of dollars, primarily through Alameda Research, FTX’s hedge fund affiliate, before it collapsed, the company’s new management disclosed earlier this year.

Private Jet

In tracing assets purchased by former executives, authorities have also identified a private jet Salame purchased while he worked at FTX, people familiar with the inquiries said. The plane could potentially be forfeited as part of a plea deal with the government or clawed back for creditors in the company’s bankruptcy proceedings.

After joining Alameda Research in 2019, Salame paid more than $6 million to snap up five restaurants in the small town of Lenox, Massachusetts.

The bankruptcy estate and prosecutors have had their eyes on assets some FTX executives purchased — allegedly with commingled customer funds. In February, the company contacted political recipients of money Bankman-Fried, Salame and Nishad Singh had donated, including super PACs that received millions of dollars, asking for the funds to be returned.

--With assistance from Hannah Miller.

Author: Ava Benny-Morrison