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A former executive of FTX, Ryan Salame, has pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange. This comes less than a month before the trial against founder Sam Bankman-Fried is set to begin.
During a court hearing in Manhattan, Salame, who co-led FTX Digital Markets, admitted to conspiring to make unlawful political contributions and operating an unlicensed money transmitting business. Salame confessed to making donations worth tens of millions of dollars to candidates in the 2022 midterms, which were funded by an Alameda subsidiary associated with FTX.
In the plea agreement, Salame agreed to forfeit approximately $1.55bn in assets, including a cash payment of $6mn, two properties, a stake in a hospitality corporation, and a Porsche 911. Damian Williams, the US attorney for the Southern District of New York, stated that Salame’s actions played a role in FTX’s rapid growth. He emphasized the commitment to pursue justice against individuals involved in criminal conduct at FTX and its affiliates.
Salame’s charges carry a maximum penalty of 10 years in prison, and his sentencing will take place in March. His lawyer, Jason Linder, expressed Salame’s desire to move forward and put this chapter behind him.
Salame is the fourth former FTX executive to cooperate with prosecutors, leaving Bankman-Fried increasingly isolated. Caroline Ellison, a close adviser to Bankman-Fried, has already cooperated with authorities. However, it is uncertain if Salame will testify against his former colleagues.
FTX, once a major crypto exchange, collapsed in November due to a multibillion-dollar shortfall in its accounts. Bankman-Fried is facing multiple criminal charges, including wire fraud and conspiracy to commit money laundering. He has pleaded not guilty. Ellison and FTX co-founder Zixiao “Gary” Wang, who have already pleaded guilty, are expected to testify at Bankman-Fried’s trial. Another former FTX executive, Nishad Singh, has also entered a guilty plea.
In addition to his role at FTX, Salame owned four restaurants in Massachusetts, with Bankman-Fried’s companies providing loans amounting to $55mn. A spokesman for Bankman-Fried declined to comment.
Salame made donations totaling more than $24mn to right-wing candidates in the 2022 election cycle. Prosecutors argue that these donations violated campaign finance laws and intend to prove that Bankman-Fried sought illegal political influence in Washington.
In the final days of the exchange, Salame informed Bahamian regulators that FTX customer funds had been used to cover losses at Alameda Research. This led to a referral to local law enforcement and the appointment of liquidators.
Bankman-Fried, who is currently in jail after his bail was revoked, has claimed that he is unable to adequately prepare for his trial while behind bars.
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