Ryan Salame, a top executive at the cryptocurrency exchange FTX, received a seven and a half year prison sentence on Tuesday for his involvement in a significant fraud scheme tied to Sam Bankman-Fried.
Salame is the first among Bankman-Fried’s close advisers to receive a long prison sentence.
Salame, 30, arrived at court donning a blue suit and bitcoin logo socks. He had pleaded guilty last year to a campaign finance law violation and operating an unlicensed money transmitting business.
Although he was not accused of participating in Bankman-Fried’s $10 billion deceit from customers, investors, and lenders, Salame’s actions to sidestep campaign donation laws significantly jeopardized “the state of our political life in this country,” according to Judge Lewis Kaplan. This led to a longer prison sentence than prosecutors had proposed.
“Efforts like that undertaken by Mr. Salame and Bankman-Fried only worsen the situation,” Kaplan remarked.
Prosecutors recommended five to seven years, whereas Salame’s defense sought an 18-month term.
“He knew exactly what he was doing and why it was being done,” Kaplan said. “He knew it was illegal, and the whole idea was to keep it hidden. Astonishing.”
Salame played a pivotal role at FTX, managing its subsidiary in the Bahamas, where the company was based.
As FTX’s value surged to $32 billion, Salame enjoyed a luxurious lifestyle, flying private jets, driving expensive cars, and acquiring restaurants in the Berkshires of western Massachusetts.
During the 2022 midterm elections, Salame made $24 million in political donations, drawing on loans from Alameda Research—Bankman-Fried’s affiliated hedge fund—and acting as a straw donor for Bankman-Fried. In a 2021 text message, Salame described Bankman-Fried’s donation strategy to both political parties as a means to influence crypto policy.
Addressing Judge Kaplan, Salame expressed that he believed he was genuinely aiding FTX customers but accepted responsibility for his actions.
“There are no excuses for breaking the law, and for that I apologize to the court and the U.S.,” he stated.
Salame was among four of Bankman-Fried’s closest associates arrested alongside him. Unlike former FTX co-founder Gary Wang, chief engineer Nishad Singh, and Alameda Research CEO Caroline Ellison, Salame did not testify against Bankman-Fried hoping for a lighter sentence.
Wang, Singh, and Ellison might be sentenced later this year, although a date has yet to be determined.
In March, 32-year-old Bankman-Fried was sentenced to 25 years in prison. Last November, a New York jury found him guilty of two counts of fraud and five counts of conspiracy, which led to the monumental collapse of his cryptocurrency exchange and hedge fund.
