Former FTX Exec Sentenced to 7.5 Years in Prison

“Efforts like those taken by Mr Salame and Bankman-Fried only make matters worse,” he said. Salame also pleaded guilty to allowing FTX customers to deposit fiat currency into a U.S. bank account without obtaining a license, a violation that has been levied against several crypto industry players over the past decade.

Addressing the judge and reading from a single-page statement, Salame said he truly believed he was helping FTX customers move fiat currency on and off the exchange.

“There are no excuses for violating the law and for that I apologize to the court and the U.S.,” he said.

Prosecutors and the defense offered contrasting portrayals of the accountant turned crypto whiz, from someone who helped commit one of the largest campaign finance offenses in US history to a low-key family man who raised money for charity in his spare time.

The government’s case against Bankman-Fried was supported by three key cooperating witnesses — former FTX co-founder Gary Wang, chief engineer Nishad Singh and Alameda Research CEO Caroline Ellison.

They all pleaded guilty to criminal charges and agreed to testify against Bankman-Fried with the hope of receiving lighter sentences. All three could face sentencing later this year.

Salame did not sign up as a cooperating witness, though his lawyers pointed to him being the first to tell Bahamian authorities about potential fraud at the exchange as it was collapsing.

Salame also handed over more than 595,000 pages of documents to authorities investigating Bankman-Fried. In court Tuesday, Assistant U.S. Attorney Samuel Raymond described Salame’s cooperation as “attempted if modest.”

Salame joined Alameda Research, FTX’s sister hedge fund, after meeting Bankman-Fried at a blockchain conference in 2019.

He rose through the ranks to become a top executive, overseeing FTX’s move from Asia to the Bahamas. Salame was FTX Digital Markets CEO when the FTX group filed for bankruptcy, exposing the mingling of customer funds to buy real estate, make investments and grow Bankman-Fried’s empire.

Since then, Salame has been raising his newborn son, seeking treatment for substance abuse and preparing to forfeit $6 million, a business and two properties in his hometown of Lenox, Massachusetts, to the U.S. Government, his lawyers said.

Salame will self-surrender to the Bureau of Prisons to start his sentence on Aug. 29.

Bankman-Fried was sentenced in March to 25 years in prison, an outcome he is planning to appeal.

The case is U.S. v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).

(Credit: Stephanie Keith/Bloomberg)