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Former FTX executive Ryan Salame has pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange, less than a month before the trial against founder Sam Bankman-Fried is set to begin.
At a court hearing in Manhattan on Thursday, Salame, who co-led the exchange’s main Bahamian entity FTX Digital Markets and became a big Republican political donor, admitted to conspiring to make unlawful political contributions and conspiring to operate an unlicensed money transmitting business.
The 30-year-old said he had made donations in his own name totalling tens of millions of dollars to candidates in the run-up to the 2022 midterms, which were “funded by transfers from the bank accounts of an Alameda subsidiary”, referring to the FTX-affiliated trading firm.
While those transfers were categorised as loans, Salame said he “never intended to repay them”.
Damian Williams, the US attorney for the Southern District of New York, said Salame’s actions “helped FTX grow faster and larger”.
“Today’s guilty plea reflects the commitment I made in December that my office would continue to pursue swift justice against individuals at FTX and its affiliates who engaged in criminal conduct,” he added.
Salame’s charges carry a maximum penalty of 10 years in prison. He was released after posting a $1mn bond, and will be sentenced in March.
Salame is the fourth former FTX executive to cut a deal with prosecutors, further isolating Bankman-Fried, who has already seen one of his other close advisers, Caroline Ellison, co-operate with authorities. However, he did not appear to have agreed to testify against his former colleagues.
FTX, once a major crypto exchange, collapsed in November after a crisis in digital asset markets revealed a multibillion-dollar hole in its accounts. Bankman-Fried faces a long list of criminal charges including wire fraud and conspiracy to commit money laundering. He has pleaded not guilty.
Soon after FTX’s demise, prosecutors announced guilty pleas from Ellison, who led FTX affiliate Alameda Research, and co-founder of FTX Zixiao “Gary” Wang. Both are expected to testify at Bankman-Fried’s trial.
In February, Nishad Singh — former head of engineering at FTX — also entered a guilty plea to charges including conspiracy to commit fraud.
Salame, alongside Ellison, Wang and Singh, formed a tight circle of associates that helped run Bankman-Fried’s crypto empire, which was backed by blue-chip investors including Sequoia Capital.
In addition to his role at FTX, Salame bought four restaurants in Lenox, a town in western Massachusetts where he grew up. Bankruptcy filings showed Bankman-Fried’s companies extended $55mn in loans to Salame.
A spokesman for Bankman-Fried declined to comment.
As well as helping to run FTX, Salame gave more than $24mn to rightwing candidates in the 2022 election cycle, according to public records. In the same period, Bankman-Fried donated more than $40mn to Democratic causes.
Prosecutors have alleged that such donations amounted to campaign finance violations, and have pledged to prove at trial that Bankman-Fried sought to illegally gain political influence in Washington.
In the exchange’s final days late last year, Salame informed Bahamian regulators that FTX customer funds had been used to cover losses at Alameda Research, according to court records in the Caribbean country.
The allegation triggered a referral to local law enforcement, followed by the appointment of liquidators.
Bankman-Fried, who was jailed last month after a judge revoked his bail in the face of allegations that he had attempted to intimidate Ellison and other potential witnesses, has repeatedly protested that he is unable to properly prepare for his trial while behind bars.
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