Ryan Salameh, a top executive at failed cryptocurrency exchange FTX, was sentenced to seven years and six months in prison on Tuesday, becoming the first member of FTX adviser Sam Bankman Freed to receive prison time.
Salameh, 30, was a trusted aide to the exchange's founder, Bankman Fried, who pleaded guilty last year to violating campaign finance laws and operating an unlicensed money transmitting business. Salameh is one of four top lieutenants of the FTX empire to plead guilty to crimes since the company's collapse in November 2022.
Salameh's sentence was longer than the five to seven years sought by prosecutors; his defense had sought an 18-month sentence.
Salameh, wearing a blue suit and socks emblazoned with the Bitcoin logo, stood before Judge Lewis A. Kaplan in U.S. District Court in Manhattan as the sentence was read out, with Judge Kaplan calling Salameh's crimes “astonishing.”
“The political situation in this country is at a critical point,” he said. “Initiatives like those being undertaken by Mr. Salameh and Mr. Bankman Freed will only make it worse.”
Salameh is scheduled to appear in court on Aug. 29. His lawyers have asked that he serve his sentence at a federal prison in Cumberland, Maryland, near his home. Bankman Freed was convicted of fraud and conspiracy in a trial last year and is serving a 25-year sentence.
Before FTX's collapse, Salameh was a key figure at the exchange, overseeing its Bahamas subsidiary, where the company was based. As FTX grew into a $32 billion business, Salameh spent lavishly, enjoying luxury cars and private jets and buying a restaurant in the Berkshires of Massachusetts. He was also a prolific political donor, giving more than $24 million to the 2022 midterm elections, mostly to Republicans.
After FTX collapsed, Salameh became the target of federal prosecutors and had his Maryland home searched. Bankman Freed was charged with stealing $8 billion from FTX clients and using the money for political contributions, venture investments, and luxury real estate purchases. Three FTX executives, Gary Wang, Nishad Singh, and Caroline Ellison, pleaded guilty to financial crimes and agreed to cooperate with the government. They are awaiting sentencing.
In September, Salameh also pleaded guilty to making illegal “dummy donor” contributions at the direction of Bankman Freed to avoid federal disclosure requirements, in what prosecutors called “the largest campaign finance violation ever” in U.S. history.
As part of the plea agreement, Salameh agreed to pay a $6 million fine, pay more than $5 million in restitution and forfeit two Massachusetts properties and his Porsche.
In the memo, prosecutors argued that Salameh was motivated by a desire for money and influence. Despite FTX's collapse, he withdrew $5 million from the exchange, using the funds to pay for personal expenses and hire a PR firm. Prosecutors wrote that Salameh withdrew another $600,000 from his account on FTX's U.S. platform just hours before the collapse.
Judge Kaplan argued for those withdrawals during Tuesday's hearing. “I was first. I was first in the lifeboat,” he said of Salameh. “All those guys are shit.”
In a memo to Judge Kaplan, Salameh's lawyers said Salameh had no idea that Bankman Freed had stolen billions of dollars from its clients. The news was “shocking and disheartening to Ryan Salameh and to everyone else around the world,” they wrote.
The lawyers said Salameh's life has been “devastated” and that FTX's collapse has brought “shame and instability” to his family. Salameh is in a long-term relationship with Michelle Bond, a former crypto industry lobbyist who assisted Bankman Freed. Bond gave birth to the couple's first child in November, the memo noted. Salameh has also begun to address substance abuse issues and plans to attend law school, the lawyers wrote.
Speaking in court on Tuesday, Salameh's lawyer, Jason Linder, described his client as a “mere tool” of Bankman Freed. Unlike Wang, Singh and Ellison, Salameh did not testify against Bankman Freed in court last year. But his lawyers said he voluntarily submitted documents and “offered assistance and cooperation” with the government as it prepared for trial.
During Tuesday's hearing, Judge Linder pointed to the packed row of friends and family who had accompanied Salameh, including Ms Bond, Salameh's mother and aunt.
Before the sentence was handed down, Salameh briefly addressed the court, apologizing to FTX customers and their families. “Mom, I can't imagine how you feel,” he said, choking up.
But Judge Kaplan said lengthy sentences were necessary to send a message to the wealthy about “the consequences of distorting our electoral system and its rules.”
Salameh “deliberately helped destroy the limited transparency guaranteed by US law in this area,” he said.