Ryan Salame, former co-chief executive officer of FTX Digital Markets Ltd., appeared in federal court in New York, on Sept. 7, 2023.
Stephanie Keith | Bloomberg | Getty Images
Former FTX executive Ryan Salame pleaded guilty Thursday in New York federal court to campaign finance and money laundering crimes, and agreed to forfeit more than $1.5 billion.
Salame admitted, during his plea, that from fall 2021 to November 2022, he directed tens of millions of dollars in political contributions to both Democrats and Republicans in his own name while the money came from Alameda Research, the hedge fund arm of cryptocurrency owner exchange FTX.
Those contributions were made at the behest of former FTX CEO Sam Bankman-Fried, Salame said.
Bankman-Fried is scheduled to go on trial Oct. 3 on wire fraud and securities fraud charges related to her alleged theft of billions of dollars in customer funds from FTX.
“From at least in or about 2020, up to and including in or about November 2022, Ryan Salame, the defendant, conspired in numerous conspiracies to further the interests of Samuel Bankman-Fried … and the cryptocurrency company Bankman-Fried founded and controlled — along with FTX.com (“FTX”) and Alameda Research (“Alameda”) — by operating an illegal money remittance business and violations of federal election law,” said the charging document filed against Salame.
That document says Salame, in a private message to a confidante, wrote that “the purpose of these bipartisan donations is to ‘avoid anti crypto dems for pro crypto dems and anti crypto repubs for pro crypto repubs,’ and the donations will likely go through Salame ‘to get rid of that republican side.'”
Salame, who was released on a $1 million bond Thursday, faces a maximum possible sentence of 10 years in prison for a campaign finance violation and a charge of operating an unlicensed money transmitter business.
His sentencing was set for March 6 by Judge Lewis Kaplan in US District Court in Manhattan.
In addition to the monetary forfeiture, which will be paid to the US government, the 30-year-old Salame will pay $5 million to FTX’s creditors and a $6 million fine to the government. Salame will also give up two homes he owns in Lenox, Massachusetts, and his 2021 Porsche car.
Salame’s lawyer, Jason Linder of the firm Mayer Brown, in a statement said. “Ryan is looking forward to putting this chapter behind him and moving forward with his life.”
A source told CNBC that Salame is not cooperating with federal prosecutors preparing for the criminal fraud trial of 31-year-old Bankman-Fried.
But three other former executives who previously pleaded guilty in the same court are expected to testify against Bankman-Fried.
They are Caroline Ellison, former CEO of Alameda; former FTX technology chief Gary Wang; and Nishad Singh, who is FTX’s engineering boss.
US Attorney Damien Williams, whose office is prosecuting the FTX cases, said in a statement, “Ryan Salame has agreed to advance the interests of FTX, Alameda Research, and his complicit through an illegal political influence campaign and through an unlicensed money-transmitting business, which helped FTX grow faster and bigger by operating outside the law.”