The former chief executive of FTX's Bahamas subsidiary was ordered to spend 7 1/2 years in prison, the first of Sam Bankman-Fried's close associates to be sentenced in the wake of the cryptocurrency exchange's implosion.
Ryan Salame dropped his head as Judge Lewis A. Kaplan sentenced him in a Manhattan courtroom Tuesday, eight months after he reached a plea deal with federal prosecutors over the multibillion dollar collapse of FTX.
While he was not accused of helping FTX founder Sam Bankman-Fried steal about $10 billion from customers, investors and lenders, Salame's efforts to circumvent campaign donation laws jeopardized the stability of political life in the U.S., Kaplan found.
The prison term is more than prosecutors had asked for.
The government said Salame, who pleaded guilty to violating campaign finance laws and operating an unlicensed money transmitter, deserved five to seven years behind bars, compared to the 18 months or less the defense advocated for.
"He knew precisely what he was doing, he knew why it was being done," Kaplan said. "He knew it was illegal and the whole idea was to hide it from the world. Astonishing."
Salame is the first of four former FTX executives to be sentenced on criminal charges stemming from the implosion of the exchange and sister hedge fund Alameda Research in late 2022.
Judge's Views
Kaplan's judgment could indicate how tough he is inclined to be with Bankman-Fried's colleagues who were by his side as the company rose to dizzying heights before crashing and rattling the crypto industry.
In handing down his sentence, Kaplan said there was a very substantial need for general deterrence as these types of crimes were "hard to detect on the fly" and hard to unravel "when everything goes to hell."
Addressing Salame's supporters in the courtroom, including his mother and partner Michelle Bond, Kaplan said the 30-year-old could be out of custody in 4.5 years through a combination of good behavior and other incentives in the federal prison system.
Salame's lawyers sought to distance him from the yearslong fraud that took place at the crypto exchange, arguing he was as shocked as anyone.
"And he was duped, as was everyone else, into believing that the companies were legitimate, solvent and wildly profitable," his attorneys wrote in a memo filed in court ahead of sentencing.
His attorney Jason Linder described Salame as "merely a tool" who operated under the thrall of Bankman-Fried.
Salame's Activities
Salame made millions in political donations while at FTX, drawing on loans from Alameda Research and acting as a straw donor for Bankman-Fried.
In a text message sent to an unnamed confidante in late 2021, Salame described Bankman-Fried's desire to donate to both sides of the aisle in a bid to influence crypto policy.
The offending came at a time when the state of political life in America was in jeopardy, Kaplan said, and the amount of "money sloshing around the political system" was a contributing factor.
