Former FTX Executive Ryan Salame Pleads Guilty in Extensive Fraud Case

Ryan Salame, a former high-ranking executive at the crypto exchange FTX, has entered a guilty plea in connection with criminal charges related to the extensive fraud case involving FTX’s founder, Sam Bankman-Fried.

As part of the agreement, Salame has agreed to pay $5 million to debtors of FTX and $6 million in fines to the government.

Another Blow for SBF: Salame’s Guilty Plea

In a court appearance on Thursday, Ryan Salame pleaded guilty to conspiracy to defraud the Federal Elections Committee and for operating an unlicensed money-transmitting business. These charges could result in a prison sentence of up to ten years. Salame was formerly the CEO of FTX’s subsidiary in the Bahamas and a significant Republican donor who contributed $24 million to political candidates during the 2022 midterm election cycle. He admitted to falsely labeling $10 million worth of these contributions as “loans.”

“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 of the law,” said US Attorney Damian Williams in a statement following Salame’s guilty plea.

During his plea, Salame stated that he believed the loans would eventually be forgiven and not need to be repaid.

Federal prosecutors singled out Salame following FTX’s collapse and conducted a search at his Maryland residence earlier this year. Legal documents directly linked him to Sam Bankman-Fried’s alleged “straw donor” scheme, which aimed to bypass campaign contribution limits by using proxy donors.

Stacked Odds Against Bankman-Fried

Salame’s guilty plea is another blow to Sam Bankman-Fried, whose trial is scheduled to begin on October 3. Salame’s decision to cooperate with authorities makes him the fourth executive within Bankman-Fried’s inner circle to admit to criminal wrongdoing since FTX’s collapse in November. Nishad Singh, Caroline Ellison, and Gary Wang have previously pleaded guilty to fraud charges.

Bankman-Fried, who was arrested in December, faces seven criminal counts, including wire fraud and securities fraud. He stands accused of diverting billions from FTX’s customer funds to finance real estate acquisitions, political donations, and investments in other firms. Bankman-Fried has pleaded not guilty, though his bail was recently revoked after a judge ruled that he attempted to interfere with witnesses.

Featured Image Courtesy Of Bloomberg.