Ryan Salame, the former co-CEO of FTX’s Bahamian subsidiary, has recently pleaded guilty to unlawful campaign donations that were directed towards causes favored by FTX founder, Sam Bankman-Fried. This revelation comes as a shocking blow to the world of cryptocurrencies, as Salame, Bankman-Fried, and former FTX engineering chief Nishad Singh are accused of using customer funds to contribute to political candidates who support legislation favorable to the crypto industry.
What makes this case even more alarming is the fact that Salame is now the fourth former executive of Bankman-Fried’s companies to plead guilty. In addition, Bankman-Fried himself is scheduled to stand trial on October 3, facing allegations of stealing customer funds. This series of legal troubles is casting a shadow over the once-celebrated FTX empire.
Salame’s guilty plea comes with serious charges, specifically one count of conspiracy to make unlawful political contributions and one count of conspiracy to operate an unlicensed money transmitting business. The extent of his involvement became evident when it was revealed that Salame had donated over $24 million to Republican candidates and causes during the 2022 election cycle, according to Federal Election Commission data. What makes matters worse is that Salame admitted the money he used for these donations was recorded as loans from a company called Alameda, with no intention of ever paying them back.
As part of his plea agreement, Salame has agreed to forfeit a staggering $1.5 billion. However, prosecutors have accepted his surrender of $6 million, two Massachusetts properties, his interest in a company called East Rood Farm, and even a 2021 Porsche, in order to satisfy the judgment. Furthermore, Salame is also compelled to pay $5.6 million in restitution to FTX as part of the company’s ongoing bankruptcy proceedings.
Salame’s sentencing is currently scheduled for March 6, 2024. This case serves as a stern reminder of the need for transparency and ethical conduct within the cryptocurrency industry. With the trial of Sam Bankman-Fried looming, the future of FTX remains uncertain, and investors and users are closely watching how these legal proceedings will unfold.
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