A 4th FTX executive pleads guilty over crypto exchange's collapse ahead of Sam Bankman-Fried's trial
- Former FTX executive Ryan Salame pleaded guilty to campaign finance charges on Thursday.
- The plea further isolates Sam Bankman-Fried, who is scheduled to go to trial in October.
Former FTX executive Ryan Salame pleaded guilty to fraud and campaign finance charges Thursday afternoon, the latest twist in the saga of the cryptocurrency exchange's collapse.
Salame is the fourth top official in the exchange to plead guilty to charges brought by the US Attorney's office in Manhattan. Sam Bankman-Fried, the company's former CEO and founder, is scheduled to go to trial on fraud and conspiracy charges in October.
In Manhattan federal court, Salame pleaded guilty to defrauding the Federal Elections Commission and to illegally making a campaign contribution on behalf of a company.
"I made $10 million in political contributions and called them loans, which I never intended to repay," Salame told US District Judge Lewis Kaplan, according to Inner City Press. "This was supported by Sam Bankman-Fried. I knew it was prohibited."
Prosecutors say Bankman-Fried and other executives defrauded FTX investors and depositors by commingling funds with Alameda Research, a hedge fund Bankman-Fried also controlled. News about the mixed use of funds led to the collapse of the exchange and wiped out the value of its in-house proprietary tokens.
Former Bankman-Fried lieutenants Caroline Ellison, Gary Wang, and Nishad Singh have all previously pleaded guilty to fraud charges and agreed to cooperate with the Justice Department in its investigation. Salame is not cooperating, according to The New York Times.
Salame, a native of the Berkshires in Massachusetts, has made a name for himself as an investor in the restaurant industry there. His restaurants, branded as the Lenox Eats collective, include Firefly Gastropub and Olde Heritage Tavern — favorites among locals and seasonal residents alike.
Within FTX, Salame connected Bankman-Fried to political power brokers and helped try to legitimize cryptocurrency in the corridors of Washington, DC. While Bankman-Fried poured millions into causes associated with Democratic candidates, Salame did the same for Republican candidates.
In addition to fraud and conspiracy allegations, federal prosecutors previously brought charges alleging Bankman-Fried participated in a straw donor scheme. They dropped that part of the indictment in July because of the United States' extradition treaty with the Bahamas, where Bankman-Fried was first arrested, which does not cover the charges.
As part of his plea deal, Salame agreed to pay back $5 million to creditors trying to pull money from the ruins of FTX. The exchange declared bankruptcy after Bankman-Fried resigned from the company. Salame is also required to pay $6 million in fines to the US government and give up his Porsche and properties in Massachusetts.
"Ryan looks forward to putting this chapter behind him and moving forward with his life," his attorney Jason Linder of the law firm Mayer Brown said in a statement.
Salame was released Thursday on a $1 million bond. Kaplan said he would be sentenced in March 2024.
Bankman-Fried, meanwhile, remains in federal jail in Brooklyn ahead of his trial. His lawyers have argued that, under custody, he has too little time and opportunity to review the evidence prosecutors collected for their case.
This story has been updated. Haven Orecchio-Egresitz contributed reporting.
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