Ryan Salameh, a former executive of FTX founder Sam Bankman Freed, was sentenced to 90 months in prison, or 7.5 years, followed by three years of probation. Salameh also was ordered to pay The forfeiture amounted to more than $6 million, and restitution was more than $5 million.
The sentence was heavier than the five to seven years proposed by prosecutors and significantly longer than the 18 months Salameh’s defense team had sought.
During September, Salameh pleaded guilty conspiracy to make illegal political contributions, conspiracy to defraud the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business.
Judge Lewis Kaplan sentenced Sam Bankman Freed to 25 years in prison in March.
Former co-CEO of FTX Digital Markets, Ryan Salameh, was released from federal court in New York, USA, on Tuesday, May 28, 2024.
Yuki Iwamura | Bloomberg | Getty Images
In 2021, Salameh moved from a senior role at Bankman Freed’s crypto hedge fund Alameda Research to become co-CEO of FTX Digital Markets, FTX’s Bahamas subsidiary. During his tenure, Salameh spent millions on real estate and campaign contributions.
Bahamian lawyers estimate that Bankman Freed and Salameh spent $256.3 million to buy and maintain 35 properties across New Providence. These are the properties that Bahamian regulators were trying to recover in FTX’s U.S. bankruptcy protection proceedings. The Federal Election Commission Salameh has donated more than $24 million to Republican candidates and causes during the 2022 election cycle.
Days before FTX filed for bankruptcy in 2022, Salameh visited Bahamian authorities to inform them that Bankman Freed may have committed fraud by transferring client funds from the crypto exchange to another of his firms, Alameda Research. According to the criminal complaint, Salameh uncovered “possible mishandling of client assets” by Bankman Freed.
It was one of the first public admissions of an insider rebellion against Bankman Freed, who was convicted of stealing more than $8 billion in client cash that he believed was safely stored at the exchange.
Former co-CEO of FTX Digital Markets Ryan Salameh pleaded guilty to two charges, including conspiracy to make illegal U.S. political contributions, in New York City on September 7, 2023, and was released from federal court.
Brendan McDiarmid | Reuters
But several other insiders subsequently testified for the prosecution, including former Alameda CEO and SBF ex-girlfriend Caroline Ellison, FTX co-founder Gary Wang, and FTX’s former head of engineering Nishad Singh, ultimately leading to his guilty verdict in November. Salameh did not take the stand at Bankman Freed’s trial.
U.S. Attorney Damien Williams said in a statement that Tuesday’s sentence underscores the “significant consequences for crimes like this.”
“Salameh’s involvement in two serious federal crimes has undermined public confidence in the integrity of our elections and financial systems,” Williams added.
Former state and federal prosecutor Mark Bini told CNBC that the sentence underscores the seriousness with which the judge viewed FTX’s fraud, which included a multimillion-dollar campaign finance scheme in which Salameh was directly involved.
“Mr. Salameh’s lawyers tried to argue that providing documents to the government was a sign of Mr. Salameh’s cooperation and remorse, but Judge Kaplan clearly did not see it that way,” Bini said.
Salameh is the first of SBF’s executives to be convicted since the exchange filed for bankruptcy in November 2022.
— CNBC’s Dan Mangan contributed to this report.