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Former FTX executive Ryan Salame will lose $1.5 billion after pleading guilty to criminal charges.


new York

Ryan Salame, a former senior executive at FTX, the now bankrupt cryptocurrency trading platform, pleaded guilty to criminal charges in a New York court on Thursday afternoon. He also agreed to give up $1.5 billion.

The plea comes less than a month before the trial of Sam Bankman-Fried, co-founder of the digital currency exchange. Prosecutors say Bankman-Fried orchestrated one of the biggest financial frauds in US history.

Salame served as chief executive of FTX and a top lieutenant for Bankman-Fried, who is to be tried on October 2 facing numerous charges of wire fraud and conspiracy. Bankman-Fried pleaded not guilty to the charges.

Salame pleaded guilty to one count of conspiracy to operate an unlicensed money transfer business and one count of conspiracy to make illegal political contributions and defraud the Federal Election Commission. He faces a maximum sentence of 10 years in prison.

According to the plea agreement, in addition to the forfeiture of $1.5 billion, Salame will return $5.6 million to FTX debtors. Salame also agreed to pay $6 million to the U.S. government before his sentencing date and to forfeit his assets in the Berkshires and a 2021 Porsche 911. His sentencing is set for March 6, 2024.

Salamé’s guilty plea is a turnaround. His attorney previously told prosecutors he would invoke his Fifth Amendment rights against self-incrimination if called as a witness against Bankman-Fried at next month’s trial, according to a filing last month.

A lawyer for Salame could not immediately be reached for comment.

Three other insiders have already pleaded guilty and have been cooperating with authorities against Bankman-Fried since the company collapsed and filed for bankruptcy protection last November: Caroline Ellison, former director of Alameda Research, the hedge fund of Bankman-Fried; Gary Wang, co-founder of FTX and Nishad Singh, former engineer at FTX.

Prosecutors say Salame and Singh made more than 300 political donations totaling tens of millions of dollars using funds from FTX clients, obscuring Bankman-Fried’s role and exceeding federal contribution limits.

“Ryan Salame has agreed to further the interests of FTX, Alameda Research and its co-conspirators through an illegal political influence campaign and through an unlicensed money transfer business, which has allowed FTX to grow faster and grow by operating outside the law,” US said. Attorney Damian Williams, in a statement.

Prosecutors allege that Bankman-Fried misused his clients’ funds to make loans to Alameda, fund venture capital investments and feed straw donors who were used to contribute to political, Republican and Democratic campaigns, in order to attempt to influence political decisions impacting the crypto industry.

Prosecutors said Salame played a role in the alleged scheme involving political donations. They want to show the jury a private message Salame sent to a family member in November 2021, explaining that he was a straw donor that Bankman-Fried used to make political donations.