Overview

Ryan Salame, a former executive at FTX, has pleaded guilty in a New York federal court to campaign finance and money-transmitting crimes. As part of the plea deal, Salame has agreed to forfeit over $1.5 billion.

Details

During his plea, Salame confessed to funneling tens of millions of dollars of political contributions to both Democrats and Republicans in his own name, even though the money originated from Alameda Research, the hedge fund arm of FTX. Salame revealed that these contributions were made at the request of then-FTX CEO Sam Bankman-Fried.

Bankman-Fried is set to stand trial on October 3rd on charges of wire fraud and securities fraud, accused of embezzling billions of dollars in customer funds from FTX.

Charging Document

The charging document filed against Salame states that he engaged in multiple conspiracies to advance the interests of Samuel Bankman-Fried and the cryptocurrency companies he founded, including FTX and Alameda Research. These activities involved operating an unlawful money transmitting business and violating federal election laws. In a private message, Salame expressed the purpose of these bipartisan donations as “to weed out anti-crypto Democrats for pro-crypto Democrats and anti-crypto Republicans for pro-crypto Republicans.”

Sentencing and Forfeiture

Salame, released on a $1 million bond, could face a maximum sentence of 10 years in prison for the campaign finance violation and operating an unlicensed money-transmitting business. His sentencing is scheduled for March 6th. In addition to forfeiting the money, Salame will pay $5 million to FTX debtors and $6 million in fines to the government. He will also surrender two houses and his 2021 Porsche.

Cooperation and Testimony

A source has stated that Salame is not cooperating with federal prosecutors, who are preparing for the criminal fraud trial of Sam Bankman-Fried. However, three other former executives who pleaded guilty are expected to testify against Bankman-Fried.

Statement from U.S. Attorney Damien Williams

U.S. Attorney Damien Williams, in charge of prosecuting the FTX cases, has stated that Ryan Salame participated in an unlawful political influence campaign and an unlicensed money transmitting business. These actions aided FTX’s growth outside the boundaries of the law.