Ex-FTX Exec Salame Requests 18-Month Sentence

Attorneys for Ryan Salame, the former co-CEO of FTX Digital Markets, have called for a lenient prison sentence not exceeding 18 months. On May 14, they submitted a request to the United States District Court for the Southern District of New York. The legal team emphasized that Salame’s commitment to significant restitution and forfeiture justified a lighter sentence.

Salame had previously admitted guilt in September 2023 to charges of conspiracy to operate an unlicensed money-transmitting business and infringing campaign finance laws. His sentencing hearing, overseen by Judge Lewis Kaplan, is slated for May 28. In their May 14 memo, the defense argued that Salame lacked awareness of the fraudulent activities carried out by other leaders of Alameda and FTX. They insisted that Salame did not deceive or steal from customers, and he was misled by his peers into believing that the businesses were lawful, solvent, and highly profitable.

The filing further elaborated that during the trial of Sam Bankman-Fried, testimonies, including those from Caroline Ellison, revealed that Salame was kept in the dark as the FTX exchange was nearing its collapse in November 2022. On November 6, 2022, Ellison and Bankman-Fried allegedly continued their deceit, leaving Salame oblivious to the ongoing fraud.

Salame took action against the fraudulent activities of FTX by reporting them to the Securities Commission of the Bahamas on November 9, 2022. This was shortly before Sam Bankman-Fried resigned and FTX declared bankruptcy. Following these events, Bankman-Fried was extradited to the United States from the Bahamas, faced trial, and was convicted on seven felony counts, resulting in a 25-year prison sentence in March.

Salame’s attorneys argued that an 18-month prison term was appropriate given his minor role in the conspiracies he admitted to and pointed out that he is unlikely to reoffend. They contrasted this with the harsher penalty given to Bankman-Fried, which served as a warning to others in the cryptocurrency industry. They maintained that Salame has fully acknowledged his mistakes and taken responsibility for his actions.

If sentenced according to the lawyers’ request, Salame would be the second major figure associated with FTX and Alameda Research to face sentencing, following Bankman-Fried. The fate of other key players like former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang, and former engineering director Nishad Singh remained uncertain, though all had pled guilty to various charges and testified at Bankman-Fried’s trial.

Since his guilty plea in 2023, Salame has remained out of jail on a $1 million bond. As part of his plea agreement, he committed to paying around $6 million in fines to the U.S. government and another $6 million to FTX creditors. He agreed to forfeit two properties and a business, which his attorneys stated would leave him without any remaining assets.

In sum, the defense team positioned Salame as a relatively minor participant who was hoodwinked by his colleagues, urging the court to impose a sentence that reflects his willingness to rectify his wrongs and contribute to substantial restitution.