Former FTX executive Ryan Salame pleaded guilty in a New York federal court on Thursday to a series of charges related to campaign finance and money-transmitting crimes. In a shocking turn of events, Salame also agreed to forfeit over $1.5 billion. This development sheds light on a web of political contributions that funneled millions of dollars to both Democrats and Republicans, orchestrated by Salame but secretly funded by Alameda Research, the hedge fund arm of cryptocurrency exchange owner FTX.
Implication of the confession
Salame’s confession implicated the former FTX CEO, Sam Bankman-Fried, who is scheduled to stand trial on October 3, facing wire fraud and securities fraud charges related to the alleged embezzlement of billions of dollars in customer funds from FTX.
According to court documents, Salame was actively involved in multiple conspiracies aimed at advancing the interests of Bankman-Fried and the cryptocurrency companies under his control, including FTX.com and Alameda Research. These activities included operating an unlawful money-transmitting business and violating federal election laws.
One particularly incriminating message uncovered in the investigation was a private message from Salame to an undisclosed confidant. In it, he stated that the purpose of these bipartisan donations was “to weed out anti-crypto Dems for pro-crypto Dems and anti-crypto Repubs for pro-crypto Repubs.” The donations were allegedly routed through Salame to achieve this objective.
Maximum Possible Sentence
Salame, who was released on a $1 million bond, now faces a maximum possible sentence of 10 years in prison for the campaign finance violation and the charge of operating an unlicensed money-transmitting business. His sentencing is scheduled for March 6, 2024, before Judge Lewis Kaplan in the U.S. District Court in Manhattan.
In addition to the substantial monetary forfeiture, which will be paid to the U.S. government, Salame has agreed to pay $5 million to FTX debtors and $6 million in fines to the government. Furthermore, he will relinquish ownership of two houses in Lenox, Massachusetts, and his 2021 Porsche automobile.
Salame’s attorney, Jason Linder of Mayer Brown, released a statement saying, “Ryan looks forward to putting this chapter behind him and moving forward with his life.”
No Co-Operation from Salame
Notably, Salame is not cooperating with federal prosecutors preparing for Bankman-Fried’s criminal fraud trial. However, three other former executives who previously pleaded guilty in the same court are expected to testify against Bankman-Fried. These witnesses include Caroline Ellison, the former CEO of Alameda; Gary Wang, former FTX technology chief; and Nishad Singh, who previously held the position of FTX’s engineering boss.
U.S. Attorney Damien Williams, whose office is prosecuting the FTX cases, commented on the situation, stating, “Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside the law.”