Bankman-Fried’s top lieutenant Salame pleads guilty to criminal charges
Bankman-Fried goes on trial next month on fraud and conspiracy charges stemming from FTX’s November 2022 collapse
New York — Ryan Salame, the former co-CEO of FTX’s Bahamian subsidiary and a top lieutenant to the cryptocurrency exchange's founder Sam Bankman-Fried, pleaded guilty on Thursday to two charges including conspiring to make unlawful US political contributions.
US district judge Lewis Kaplan in Manhattan accepted Salame’s plea agreement with prosecutors that made him the fourth former executive from Bankman-Fried’s companies to plead guilty. His plea came less than a month before Bankman-Fried’s scheduled October 3 trial on fraud and conspiracy charges stemming from now-bankrupt FTX’s November 2022 collapse. Kaplan also oversees Bankman-Fried’s case.
Salame also pleaded guilty to conspiring to operate an unlicenced money-transmitting business. But there was no indication that he was cooperating with the prosecution or would testify against Bankman-Fried at trial.
Jason Linder, a lawyer for Salame, declined to comment after the hearing.
Former Alameda CEO Caroline Ellison, former FTX technology chief Gary Wang and former FTX engineering chief Nishad Singh previously pleaded guilty and are expected to testify against Bankman-Fried.
Salame is scheduled to be sentenced on March 6 2024. He said that he had agreed to forfeit more than $1.5bn in connection with the plea deal, though prosecutors will accept his turning over of $6m, two Massachusetts properties and a 2021 Porsche automobile to satisfy that order.
Bankman-Fried stole billions of dollars in FTX customer deposits to plug losses at his hedge fund, Alameda Research, and lied to investors and lenders about his companies’ financial condition, according to prosecutors. Bankman-Fried has pleaded not guilty.
Bankman-Fried rode a boom in the values of bitcoin and other digital assets to become a multibillionaire and an influential political donor before his exchange collapsed amid a flurry of customer withdrawals.
Prosecutors have said Bankman-Fried used stolen customer funds to donate more than $100m to political campaigns in a bid to support favorable cryptocurrency regulations and concealed some donations through two "straw donors", Salame and Singh.
Salame had worked for Ernst & Young and Circle Internet Financial before joining FTX Digital Markets.
He gave more than $24m to Republican candidates and causes in the 2022 election cycle, according to Federal Election Commision data, making him one of that year’s top donors.
Prosecutors in August said Salame told a family member in a November 2021 message that Bankman-Fried hoped political donations would "weed-out" anti-crypto Democratic and Republican legislators — meaning defeat them in elections — and would likely "route money" through Salame to "weed out" anti-crypto Republicans.
Salame was not charged at the time. His lawyer told prosecutors that if called to testify Salame would invoke his right under the US constitution’s Fifth Amendment against self-incrimination.
Salame shortly before FTX’s bankruptcy told the Securities Commission of the Bahamas — the Caribbean nation’s financial regulator — that client assets held at FTX Digital Markets may have been transferred to Alameda, the regulator said in a court filing.
Bankman-Fried has been jailed since Aug. 11, when Kaplan found the defendant likely tampered with witnesses at least twice, including by sharing Ellison's personal writings with a New York Times reporter.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.