Former FTX executive Ryan Salame was sentenced to 7.5 years in prison for his role in the exchange’s downfall, but there are some positive aspects for him.
Tuesday marked the sentencing of former FTX executive Ryan Salame to seven and a half years in prison, making him the most recent leader of a defunct cryptocurrency exchange to receive a prison sentence for his contribution to the exchange’s demise. However, not everything is terrible news for Salame.
Salame, a former lieutenant to FTX founder Sam Bankman-Fried (SBF) and co-CEO of FTX Digital Markets Ltd., was expected to receive a lengthy prison sentence on Tuesday, which was delivered in a Manhattan courtroom.
However, federal prosecutors permitted Salame to retain a luxury vehicle he acquired during FTX’s meteoric rise before the ruling.
According to a government filing, the 2021 Porsche 911 Turbo S lacks adequate equity to warrant further forfeiture proceedings. The government contends that Salame ought to be obligated to pay the vehicle’s $1,500 in maintenance expenses. In the past, Salame reached a consent to relinquish assets valued at $1.5 billion about offenses associated with FTX.
Salame reached a plea agreement weeks before the commencement of Bankman-Fried’s trial, during which the former crypto magnate was convicted of misappropriating $10 billion from clients, investors, and lenders.
Last September, he entered a guilty plea for contravening campaign finance legislation and managing an unlicensed money transmission enterprise. As U.S. District Judge Lewis Kaplan renders his decision, additional former SBF associates are currently apprehensively awaiting his arrival.
The government requested Salame’s sentencing to five to seven years in prison earlier this month, citing the “serious crimes” he was found to have committed at FTX.
Salame’s attorneys argued that the sentence was excessively severe for the former CEO of FTX’s Bahamas subsidiary. They have recommended that he serve eighteen months in prison for his misconduct.
Bankman-Fried, according to Salame’s attorneys, “duped” their client into believing that FTX was secure.
However, in a sentencing memorandum, prosecutors contended that Salame withdrew more than $5 million worth of cryptocurrency from FTX in November 2022, just before the exchange declared insolvency and ceased operations, as the exchange buckled under the weight of numerous customer withdrawals.
Although Salame attempted to cooperate with the government, his interactions were deemed “relatively minor” by prosecutors in comparison to those of other FTX insiders.
“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,”
said U.S. Attorney Damian Williams in a statement Tuesday, following the sentencing.
In opposition to Bankman-Fried, former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, and chief engineer Nishad Singh all testified, but Salame never initiated a formal cooperation process with the government. He also never personally interacted with prosecutors.
Bankman-Fried received a 25-year prison sentence in March; however, certain accomplices who entered guilty pleas regarding offenses related to the collapse of FTX expect a more lenient disposition. Ellison, Singh, and Wang may face sentencing by Judge Kaplan at some point this year.
Salame’s Porsche is presumably associated with favorable circumstances. Salame acquired his Porsche 911, produced in Stuttgart, Germany, for $285,000 in October 2021.
During the same month, FTX announced a Series B-1 financing of $420,690,000, which increased the valuation of the ill-fated exchange to $25 billion.
The vehicle, which has undergone numerous performance-oriented, aesthetic, and luxury enhancements (including a heated steering wheel with matte carbon fiber trim), may still exist when Salame returns to the road in a few years.