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Seven-year sentence for ex-FTX executive in crypto exchange collapse

In a prior case this year, Bankman-Fried received a 25-year sentence for allegedly diverting $8 billion from FTX customers

Shashank Bhardwaj
Published: May 29, 2024 02:37:30 PM IST
Updated: May 29, 2024 02:42:35 PM IST

Seven-year sentence for ex-FTX executive in crypto exchange collapseRyan Salame, the former co-chief executive of FTX Digital Markets, exits the Federal Court after sentencing in New York City, U.S., May 28, 2024. Image: REUTERS/Brendan McDermid
 
Following the collapse of cryptocurrency exchange FTX in late 2022, Ryan Salame, former co-CEO of their Bahamian subsidiary, received a 7.5-year prison sentence from US federal prosecutors. This marks another legal development related to the FTX insolvency.

In a move preceding this year's sentencing of Sam Bankman-Fried, founder of now-bankrupt FTX, Ryan Salame, a former high-ranking executive, pleaded guilty last September to campaign finance violations and operating an unlicensed money-transmitting business. Bankman-Fried received a 25-year sentence earlier this year on allegations of misappropriating funds from FTX.

In a statement, US Attorney Damian Williams for the Southern District of New York voiced concerns that Ryan Salame's criminal activity eroded public confidence in the US campaign finance system and the overall financial sector. 

Last November, Salame's conviction on fraud and conspiracy charges related to the FTX collapse stemmed from what prosecutors call one of US history's most significant financial frauds.

Ryan Salame received a sentence exceeding the prosecution's recommended range of five to seven years. The final ruling includes a 7.5-year prison term followed by three years of supervised release. He was also ordered to forfeit over $6 million and pay more than $5 million in restitution.

Four former senior executives from Sam Bankman-Fried's companies admitted guilt on related charges. These include Caroline Ellison, formerly CEO of Alameda Research, Gary Wang, who led FTX's technology division, and Nishad Singh, the former HE (head of engineering) at FTX. Constance Salame is another former executive who pleaded guilty.

FTX, once a leading global cryptocurrency exchange, rose to prominence under Sam Bankman-Fried's leadership. He became a well-known figure in the industry, attracting a large customer base for buying and selling crypto on the platform. However, concerns about FTX's financial health surfaced in 2022, leading to a surge in customer withdrawals and, ultimately, the company's collapse. These events also brought to light alleged wrongdoings by Bankman-Fried.

A New York jury found him guilty last year of charges like wire fraud and money laundering conspiracy. The trial revealed that customer funds were allegedly misused for personal property purchases, political donations, and other investments.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash