SBF’s top FTX executive Ryan Salame to be sentenced

One of Sam Bankman-Freed’s top executives who pleaded guilty to financial crimes following the collapse of cryptocurrency exchange FTX is scheduled to be sentenced on Tuesday, the first of several company executives to find out how much time they will spend in prison for their roles in the company’s collapse.

Ryan Salameh, co-CEO of the company’s Bahamas-based subsidiary FTX Digital Markets, could face up to seven years in prison if Department of Justice prosecutors have their way.

But Salameh’s lawyers argue that his client should serve no more than the minimum 18 months in prison.

Former FTX executive Ryan Salameh is scheduled to be sentenced in Manhattan federal court on Tuesday. Getty Images
Salameh pleaded guilty last year to financial crimes related to FTX founder Sam Bankman Freed’s tenure as a top executive. Getty Images

Probation officials in the U.S. are arguing for a tougher sentence: 10 years in prison.

Judge Lewis A. Kaplan’s sentence for Salameh may be an indicator of how harshly he will crack down on other FTX executives who cooperated with federal investigators in exchange for more lenient pleas in court.

Last September, Salameh pleaded guilty to violating campaign finance laws and operating an unlicensed money transmitting business, transferring more than $1 billion in funds without proper oversight.

Salameh’s lawyers argue for lenient punishment, pointing out that he was the first FTX executive to alert Bahamian authorities to the potential fraud in late 2022, just days before the company filed for bankruptcy.

Bankman Freed was convicted and sentenced to 25 years in prison earlier this year for using billions of dollars’ worth of client deposits to cover risky bets he made at the hedge fund Alameda Research.

Prosecutors said Bankman Freed used FTX client funds to make more than $100 million in political donations ahead of the 2022 elections, as well as to purchase a luxurious $40 million penthouse in the Bahamas where colleagues lived and worked.

Federal prosecutors are seeking a sentence of five to seven years.

Other FTX executives, including Bankman Freed’s on-and-off girlfriends Caroline Ellison, Nashad Singh and Gary Wang, have yet to be sentenced.

The three pleaded guilty to financial crimes and agreed to testify against Bankman Freed in court, with sentencing due to take place later this year.

Unlike Ellison, Singh and Wang, Salameh did not register as a collaborator, but he did hand over nearly 600,000 pages of documents to authorities.

Sam Bankman Freed was sentenced to 25 years in prison for his role in the collapse of his cryptocurrency exchange, FTX. AFP via Getty Images

“Like everyone else, he was led to believe that these companies were legitimate, solvent and making enormous profits,” Salameh’s lawyers argued in a memorandum filed in U.S. District Court in Manhattan.

As part of his plea agreement, Salameh agreed to forfeit more than $1.5 billion, but also accepted to give up $6 million, two Massachusetts properties, stock in a company called East Rood Farms and a 2021 Porsche to satisfy the sentence.

According to a 2021 report by the Berkshire Eagle, East Rood is the company through which Salameh operates a tavern in Lenox, Massachusetts.

Lawyers for Salameh (pictured at far right with Bankman Freed and an unidentified person) plan to seek an 18-month prison sentence. FTX

Salameh also agreed to pay $5.6 million in damages to FTX in the ongoing bankruptcy proceedings.

His lawyers will also try to persuade the judge that their client has been receiving treatment for substance abuse while raising his first child with his longtime partner, Michelle Bond.

“He was a good man who did much good in this world, but he participated in two criminal conspiracies under the control of criminal masterminds who defrauded business and political leaders far more enlightened than Ryan,” his lawyers wrote in court documents. Quoted by Bloomberg News.

Another former FTX executive, Gary Wang, also pleaded guilty and cooperated with the investigation. Reuters

But federal prosecutors argue that a “significant sentence” is needed to deter others from committing similar crimes.

“Campaign finance violators must understand that this is not a minor infraction,” they wrote.

“And cryptocurrency industry players who are repeat offenders of the Transfer of Funds Act must understand the peril they pose by ignoring registration requirements.”

Caroline Ellison, head of Alameda Research, also testified against Bankman Freed and pleaded guilty. Reuters

A sentencing memorandum submitted by Salameh’s lawyers included letters from 28 people, including family and friends, pleading for lenient punishment.

Bond ran unsuccessfully in the Republican primary for the Long Island seat vacated by former Rep. Lee Zeldin.

Federal investigators alleged that Salameh illegally circumvented federal political contribution limits by arranging loans and payments for his girlfriend’s campaign.

Nishad Singh also agreed to cooperate with investigators and testify against Bankman Freed in exchange for a lighter sentence. Daniel William McKnight

These charges were filed separately from Salameh’s role at FTX.

Salameh joined the company in 2019, two years after Bankman Freed founded Alameda, and became co-chief executive officer of FTX’s Bahamas affiliate in late 2021.

Prior to joining FTX Digital Markets, he worked at Ernst & Young and Circle Internet Financial.

Salameh said that during his time at Alameda, he used the fund’s bank accounts to help FTX clients transfer fiat to the exchange, even though neither firm was licensed as a money services business as required by law.