Former FTX executive Ryan Salame was sentenced to 7 ½ years in prison Tuesday for his role in the FTX collapse.
Salame, who ran FTX’s Bahamas subsidiary as co-CEO until its November 2022 bankruptcy, pleaded guilty in September to one charge each of violating campaign finance laws and operating an illegal money-transmitting business.
He originally faced up to 10 years in prison, but prosecutors suggested he serve five to seven years. The defense suggested he serve no more than 18 months.
Salame is the first executive besides former CEO Sam Bankman-Fried to be sentenced for his participation in the stunning downfall of once-high-flying crypto exchange FTX, in which investors and customers lost billions of dollars seemingly overnight. Former executives Caroline Ellison, Gary Wang and Nishad Singh, who have each pleaded guilty to associated charges, await sentencing.
Bankman-Fried was sentenced to 25 years in prison on seven counts of fraud and conspiracy earlier this year. He is appealing his sentence and his conviction.
Salame’s lawyers sought to distance him from his fellow executive-cum-convicts. He “had absolutely no knowledge that the four people at the center of Alameda and FTX had conspired to lie and steal from their customers,” according to a sentencing memo submitted May 14.
“Ryan stole from no one. He did not lie to customers. And he was duped, as was everyone else, into believing that the companies were legitimate, solvent, and wildly profitable,” his lawyers wrote.
“As Caroline Ellison testified at Bankman-Fried’s trial, even as the FTX exchange was collapsing on November 6, 2022, she and Bankman-Fried conspired to keep Ryan in the dark about their fraud, misleading him just as they had misled the rest of the world,” they wrote.
Salame’s sentence could hint at what the three other members of Bankman-Fried’s inner circle are to expect when they, too, face Judge Lewis Kaplan in Manhattan.
Unlike Ellison, Wang and Singh, Salame did not testify for the government during Bankman-Fried’s trial. He did, however, turn over more than 595,000 pages of documents to investigators, as well as alert Bahamian regulators about potential fraud at FTX.
Despite billions in creditor losses apparent after the bankruptcy filing, FTX announced earlier this month that 98% of creditors will get 118% of their claims back in cash. The total value of property collected, converted to cash and available for distribution, will be between $14.5 billion and $16.3 billion, FTX said.
