Former FTX executive Ryan Salameh was sentenced to seven and a half years in prison on Tuesday for his role in FTX’s collapse.
Salameh served as co-CEO of FTX’s Bahamas subsidiary until its bankruptcy in November 2022, and pleaded guilty in September to one count of violating campaign finance laws and operating an unlawful money transmitting business.
He initially faced up to 10 years in prison, but prosecutors sought a sentence of five to seven years, while the defense sought a maximum sentence of 18 months.
Salameh is the first executive, other than former CEO Sam Bankman-Fried, to be convicted for his role in the stunning collapse of the once-booming cryptocurrency exchange FTX, which seemingly cost investors and customers billions of dollars overnight. Former executives Caroline Ellison, Gary Wang and Nishad Singh have each pleaded guilty to related charges and are awaiting sentencing.
Bankman Freed was sentenced to 25 years in prison earlier this year for fraud and conspiracy. He is appealing his sentence and conviction.
Salameh’s lawyers have sought to distance him from the other executives and inmates, saying he “had no knowledge that Alameda and four other key FTX individuals conspired to lie to clients and steal money,” according to a sentencing memo filed May 14.
“Ryan did not steal from anyone, he did not lie to his customers, and, like everyone else, he was led to believe that his company was legitimate, solvent and making enormous profits,” his lawyers wrote.
“As Caroline Ellison testified at Bankman Freed’s trial, even as the FTX exchange was collapsing on November 6, 2022, she and Bankman Freed conspired to keep Ryan from informing him about the fraud, and to mislead him just as they had misled the rest of the world,” they wrote.
Salameh’s ruling may hint at what three other top aides of Bankman-Freed’s should expect when they face Judge Lewis Kaplan in Manhattan.
Salameh, unlike Ellison, Wang and Singh, did not testify for the government at Bankman Freed’s trial, but he did submit over 595,000 pages of documents to investigators and warned Bahamian regulators about possible fraud at FTX.
After the bankruptcy filing revealed that creditor losses amounted to billions of dollars, FTX announced earlier this month that 98% of creditors would receive 118% of their claims in cash. The total assets recovered, liquidated and available for distribution will be between $14.5 billion and $16.3 billion, FTX said.
