Ryan Salame, a top executive at the collapsed cryptocurrency exchange FTX, was sentenced to seven and a half years in prison on Tuesday, making him the first of Sam Bankman-Fried's circle of advisers at FTX to receive a prison sentence.
Salame, 30, a trusted lieutenant of Bankman-Fried, the exchange's founder, pleaded guilty last year to a campaign finance law violation and one count of operating a money transfer business without license. He is one of four top deputies in the FTX empire who have pleaded guilty to crimes since the company imploded in November 2022.
Mr. 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 in front of Judge Lewis A. Kaplan as the sentence was read aloud in U.S. District Court in Manhattan. Judge Kaplan called Mr. Salame's crimes “astonishing.”
“The state of our political life in this country is in danger,” he said. “Efforts like those undertaken by Mr. Salame and Bankman-Fried only make things worse.”
Salame will be delivered on August 29. His attorneys 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 in the stock market, 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, Massachusetts. He was also a prolific political donor, donating more than $24 million in the 2022 midterm elections, primarily to Republicans.
When FTX imploded, Salame became the target of federal prosecutors, who searched his Maryland home. Bankman-Fried was accused of stealing $8 billion from FTX clients 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. Everyone awaits sentence.
In September, Mr. Salame also pleaded guilty and admitted that he had acted as illegal “front donor” who made political contributions under the direction of Mr. Bankman-Fried to evade federal disclosure requirements. In a sentencing memorandum, prosecutors called it “one of the largest campaign finance crimes ever” in American history.
As part of his plea deal, Salame agreed to pay a $6 million fine and more than $5 million in restitution, and 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 when FTX collapsed, he withdrew $5 million from the exchange and used the funds to pay personal expenses and hire a public relations firm. Hours before the bankruptcy, prosecutors wrote, Salame withdrew another $600,000 from his account on the American platform FTX.
Judge Kaplan invoked those withdrawals at Tuesday's hearing. “It was me first; I’m going to get on the lifeboat first,” he said of Salame. “To hell with all those customers.”
In their own memo to Judge Kaplan, Salame's defense attorneys said he did not know that Bankman-Fried was stealing billions of dollars from his clients. That news “was as shocking and disheartening to Ryan Salame as it was to anyone else in the world,” the attorneys wrote.
They said Mr Salame's life had been “decimated” and that the disappearance of FTX had brought “shame and instability” to his family. Salame has a long-term relationship with Michelle Bond, a former cryptocurrency industry lobbyist who also supported Bankman-Fried. In November, Mrs. Bond gave birth to the couple's first child, according to the memo. Salame has also begun to deal with a substance abuse problem, his attorneys wrote, and plans to attend law school.
Addressing the court Tuesday, Jason Linder, Salame's attorney, described his client as “simply a tool” of Bankman-Fried. Unlike Wang, Singh and Ellison, Salame did not testify against Bankman-Fried in court last year. But his attorneys said he had voluntarily submitted documents and “offered assistance and cooperation” to the government as it prepared for trial.
At Tuesday's hearing, Linder pointed to the rows filled with friends and family who had accompanied Salame, including Mrs. Bond and Salame's mother and aunt.
Before the sentence was announced, Salame briefly addressed the court and apologized to FTX clients and his family. “Mom, I can't imagine how you feel about yourself,” she said, her voice breaking.
But Judge Kaplan said a long sentence was necessary to send a message to the wealthy about “the consequences of perverting our electoral system and its rules.”
Salame “knowingly and willingly helped destroy the limited transparency that U.S. laws provide in this area,” he said.
