A former executive of FTX, the cryptocurrency exchange, has pleaded guilty in the United States in connection with the exchange’s dramatic collapse and subsequent bankruptcy.
Ryan Salame, a high-ranking executive at the firm, admitted to violating campaign finance laws and operating an illegal money-transmitting business. As part of his plea, he has agreed to forfeit more than $1.5 billion (£1.2 billion) to authorities.
This development precedes the October trial of FTX founder Sam Bankman-Fried, often referred to as the former “King of Crypto.” Bankman-Fried was arrested last year on fraud charges following FTX’s bankruptcy, which left numerous users unable to withdraw their funds. Prosecutors have alleged that the collapse was the result of a massive scheme orchestrated by Bankman-Fried, accusing him of misappropriating money from investors and FTX customers to finance real estate purchases, political contributions, and cover losses at his hedge fund, Alameda Research. Bankman-Fried has denied these allegations and was recently returned to custody pending trial.
Ryan Salame began working at Alameda in 2019 and later became the co-chief of FTX’s Bahamas unit, in addition to being a significant political donor. He is the fourth top executive from Bankman-Fried’s companies to plead guilty to charges, following former Alameda CEO Caroline Ellison, former FTX technology chief Gary Wang, and former FTX engineering chief Nishad Singh.
On Thursday, Salame admitted to using funds from Alameda and employing false identities to make millions of dollars in illegal campaign contributions that exceeded legal limits. Prosecutors also asserted that he was involved in using Alameda accounts to handle FTX customer funds while misrepresenting these activities to the bank, which had requested additional due diligence and proper registration when dealing directly with FTX.
Damian Williams, the US attorney for the southern district of New York, stated, “Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law.”
Although Salame has agreed to forfeit $1.5 billion, authorities have indicated that they will accept $6 million, two properties in Massachusetts, and a 2021 Porsche as part of the plea agreement, according to Reuters.
