NEW YORK, Sept 7 (Portal) – Ryan Salame, former co-CEO of FTX’s Bahamian subsidiary and top lieutenant of the bankrupt cryptocurrency exchange’s founder Sam Bankman-Fried, pleaded guilty on Thursday to unlawfully making tens of millions of dollars in campaign donations Promoting causes his boss supports.
In court filings Thursday, prosecutors said that Salame, Bankman-Fried and former FTX chief engineer Nishad Singh used FTX client funds to donate to political candidates supporting crypto-friendly legislation.
Salame was the fourth former manager of Bankman-Fried’s company to plead guilty. Bankman-Fried is scheduled to stand trial on October 3 for stealing billions of dollars in FTX customer funds to cover losses at his hedge fund Alameda Research.
Salame, 30, pleaded guilty at a hearing before US District Judge Lewis Kaplan in Manhattan to one count of conspiracy to make unlawful political donations and one count of conspiracy to operate an unlicensed money transfer business.
There was no indication that Salame was cooperating with the prosecution or would testify against Bankman-Fried.
Former Alameda CEO Caroline Ellison, former FTX Chief Technology Officer Gary Wang and former FTX Chief Technology Officer Nishad Singh previously pleaded guilty and will now testify.
“Ryan looks forward to putting this chapter behind him and moving forward with his life,” Salame’s attorney, Jason Linder of the law firm Mayer Brown, said in a statement.
Bankman-Fried, 31, previously pleaded not guilty to fraud and conspiracy charges related to the collapse of FTX in November 2022.
Prosecutors said Salame told a confidant that Bankman-Fried had hoped that political donations would “weed out” Democratic and Republican anti-crypto lawmakers — meaning they would defeat them in elections. Salame said his boss would likely route funds for donations to Republican candidates through Salame.
According to Federal Election Commission data, Salame donated more than $24 million to Republican candidates and causes in the 2022 election cycle, making him one of the biggest donors of the year.
He told the court that the money he used was recorded as a loan from Alameda, but he had no intention of paying it back.
“I knew campaign finance laws prohibited anyone from donating on my behalf with money that wasn’t my own,” Salame said.
SALAME TO HAND OVER PORSCHE
Salame joined Alameda in 2019, two years after Bankman-Fried founded it, and became co-managing director of FTX’s Bahamian subsidiary in late 2021. He worked for Ernst & Young and Circle Internet Financial before joining FTX Digital Markets.
During his time at Alameda, Salame said he used the fund’s bank accounts to help FTX clients transfer fiat currencies to the exchange, even though neither company was licensed as a money services business as required by law.
The campaign finance and money transfer schemes “helped FTX grow faster and larger by operating outside the law,” Damian Williams, the U.S. attorney in Manhattan, said in a statement Thursday.
As part of his plea deal, Salame agreed to forfeit more than $1.5 billion, although prosecutors demanded he hand over $6 million, two Massachusetts properties, his interest in a company called East Rood Farm and a 2021 Porsche will accept in order to comply with the judgment.
According to a 2021 report from the Berkshire Eagle, East Rood is the company through which Salame owns a tavern in Lenox, Massachusetts.
Salame will also repay $5.6 million to FTX in the ongoing bankruptcy proceedings.
Salame was released on $1 million bail and is scheduled to be sentenced on March 6, 2024.
Reporting by Luc Cohen in New York; Edited by Will Dunham, Emelia Sithole-Matarise, Mark Porter, David Gregorio and Leslie Adler
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