Cloud Hosting

A top executive at FTX has been jailed over his connections to the collapsed cryptocurrency exchange, making him the first of disgraced founder Sam Bankman-Frieds inner circle to also face time behind bars.

Ryan Salame, 30, was sentenced to seven-and-a-half years on Tuesday after pleading guilty last year to a campaign finance law violation and a charge of operating an unlicensed money transmitting business.

He was one of four top deputies in the FTX crypto empire who have pleaded guilty to crimes since the company fell apart in November 2022.

Salames sentence exceeded the five to seven years that prosecutors had recommended, according to The New York Times. Defense lawyers had requested an 18-month sentence.

Prior to FTXs collapse, Salame was a key figure at the exchange and one of Bankman-Frieds top lieutenants, overseeing its subsidiary in the Bahamas, where the company was based.

Like other top ranking FTX executives, Salame enjoyed expensive cars and private jets, and bought restaurants in the Berkshires, Massachusetts. According to The Times, he also spent more than $24m on the 2022 midterm elections, mostly donating to campaigns of Republican candidates.

In September 2023, Salame admitted that he had acted as an illegal straw donor at the direction of Bankman-Fried to evade federal disclosure requirements. A straw donor is someone who uses someone elses money to make a political contribution.

In a sentencing memo to Judge Lewis A Kaplan on Tuesday, prosecutors called it one of the largest ever campaign finance offenses in American history, The Times reported.

As part of his plea deal, Salame agreed to pay a $6m fine and more than $5m in restitution, and to forfeit two properties in Massachusetts as well as his Porsche. In the sentencing memo, prosecutors argued that Salame was motivated by a desire for money and influence.

Three other top FTX executives Gary Wang, Nishad Singh and Caroline Ellison also pleaded guilty to financial crimes and agreed to cooperate with the government. They all await sentencing.

Bankman-Fried was sentenced to 25 years in March after being found guilty of two counts of fraud and five counts of conspiracy. As well as his jailtime he was ordered to forfeit $11.2bn.

In their own memo to the judge, Salames defense lawyers said their client had not been aware that Bankman-Fried was stealing billions of dollars from customers. The news was as shocking and dismaying to Ryan Salame as to everyone else in the world, the lawyers wrote.

Salames life had been decimated in nearly every possible way, and that FTXs demise brought shame and instability to his family, his lawyers wrote.

At its height, FTX was worth $32bn and had a million users. Bankman-Fried was considered somewhat of an anomaly in the world of crypto, both for his age, 32, and his intention to use his wealth for altruistic purposes.

The empire came crashing down in November 2022 when a CoinDesk report revealed that most of FTXs assets were held by a quantitative trading company that Bankman-Fried also ran called Alameda Research.

The revelation sent investors and customers scrambling to withdraw their funds, which later exposed an $8bn hole in the company. As quickly as FTX grew, it fell becoming essentially bankrupt overnight.

Bankman-Fried was previously criticized by Judge Kaplan, who also presided over the FTX founders sentencing, for putting on a performance to make himself seem more likeable.

When not lying, he was evasive, hair-splitting, trying to get the prosecutors to rephrase questions for him, Judge Kaplan said. Ive been doing this job for close to 30 years. Ive never seen a performance like that.

Bankman-Fried was once known as the King of Crypto and became a billionaire who appeared on the covers of magazines and brokered lucrative deals with celebrities to promote his company.

Read the original:
Top FTX executive jailed over connections to failed cryptocurrency empire - Yahoo! Voices