Ryan Salama, the former top lieutenant of FTX founder Sam Bankman Fried, was sentenced to 90 months in prison, or seven and a half years, followed by three years of supervised release. Salameh was also ordered to pay more than $6 million in forfeiture and more than $5 million in restitution.
The sentence is more severe than the five to seven years in prison proposed by the prosecution, and far exceeds the 18-month period requested by Salameh's defense team.
In September, Salameh pleaded guilty to conspiracy to make illegal political contributions, defraud the Federal Election Commission, and conspiracy to operate an unlicensed money transmitter business.
Judge Lewis Kaplan sentenced Sam Bankman-Fried to 25 years in prison in March.
Ryan Salama, former co-CEO of FTX Digital Markets Ltd., leaves the federal court in New York, US, on Tuesday, May 28, 2024.
Yuki Iwamura | Bloomberg | Getty Images
In 2021, Salama moved from a senior position at Bankman-Fried's cryptocurrency hedge fund, Alameda Research, to co-CEO of FTX Digital Markets in the Bahamas. Salameh spent millions on real estate and campaign donations during his term.
One estimate by lawyers in the Bahamas claims that Bankman-Fried and Salama spent $256.3 million to buy and maintain 35 properties in New Providence — properties that Bahamian regulators wanted to recover in FTX's bankruptcy protection in the United States. Meanwhile, Federal Election Commission data shows Salama has given more than $24 million to Republican candidates and causes in the 2022 election cycle.
Days before FTX filed for bankruptcy in 2022, Salama went to Bahamian authorities to tell them that Bankman-Fried may have committed fraud by sending customer funds from the cryptocurrency exchange to his other company, Alameda Research. According to a criminal filing, Salama revealed “possible misuse of client assets” by Bankman Fried.
It was one of the first public admissions of a coup by an insider at Bankman-Fried, who was convicted of stealing more than $8 billion in client money that they believed was safely stored on the exchange.
Ryan Salama, former co-CEO of FTX Digital Markets, walks out of federal court after pleading guilty to two charges including conspiracy to make illegal US political contributions, in New York City, September 7, 2023.
Brendan McDiarmid | Reuters
However, since then, several other insiders, including former Alameda CEO and SBF's ex-girlfriend, Carolyn Ellison, FTX co-founder Gary Wang, and former FTX engineering chief Nishad Singh, have all testified before the prosecution that contributed to the The end is his conviction. Sentencing in November. Salama did not take his position during the Bankman-Fried trial.
Tuesday's sentence highlights “the significant consequences of such crimes,” U.S. Attorney Damien Williams said in a statement.
Williams added, “Salama's involvement in two serious federal crimes undermined public confidence in the American elections and the integrity of the financial system.”
Mark Penny, the state's former federal prosecutor, told CNBC that the ruling confirmed that the judge considered FTX's fraud, including a multimillion-dollar campaign finance scheme in which Salameh was directly involved, to be extremely serious.
“While Salama’s attorney sought to argue that his submission of documents to the government demonstrated his cooperation and remorse, Judge Kaplan clearly did not view the matter that way,” Binney said.
Salama is the first person from SBF's executive team to be sentenced since the exchange declared bankruptcy in November 2022.
— CNBC's Dan Mangan contributed to this report.
