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FTX’s Salame Surrenders Assets and $11M After Guilty Plea

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Ryan Salame, the former co-CEO of FTX Digital Markets, recently entered a guilty plea in a U.S. District Court for defrauding the United States Federal Election Commission (FEC) and conspiring to operate an unlicensed money-transmitting business.

His plea follows a string of guilty pleas from other high-ranking executives from FTX and Alameda Research, making Salame the latest domino in a complex case with far-reaching consequences.

Whistleblower Turned Defendant

Ryan Salame had been one of the first insiders at FTX to alert authorities about the company’s dubious activities.

According to the evidence presented in court, he reported that FTX and its sister business, Alameda Research, were mixing client funds. As a result, this action was a crucial factor that led to FTX’s eventual demise.

The whistleblower, however, has been linked to illegal behavior, including breaches of campaign funding laws and unauthorized company operations. The allegations come from Salame’s participation in his girlfriend Michelle Bond’s congressional candidacy in 2022.

Salame admitted to making unauthorized campaign contributions, not only on a personal level but also on behalf of a corporation. “I made $10 million in political contributions and called them loans, which I never intended to repay,” Salame admitted. Sam Bankman-Fried, the former CEO of FTX, allegedly supported his illicit activities.

Salame will pay the U.S. government around $6 million in penalties as part of his plea agreement and will pay off over $5 million to FTX’s debtors. Additionally, he will surrender two properties in Massachusetts and a Porsche registered in his name. Ryan Salame remains free on a $1 million bond and is awaiting sentencing, expected to occur in March 2024.

​​Salame Joins List of Guilty Pleas

The guilty plea from Salame adds another layer to an already complicated case involving FTX and Alameda Research. Both companies have been hard hit by criminal charges and ongoing investigations. Former executives from these firms, including Caroline Ellison and Gary Wang, have already pleaded guilty to federal fraud charges.

The much-anticipated trial of former FTX CEO Sam Bankman-Fried, who has pleaded not guilty to 12 criminal charges, is slated to begin in October 2023.

These developments indicate that federal prosecutors are closing in on a widespread case of financial misconduct affecting the crypto industry and the political arena.

Ryan Salame’s plea and the additional charges against other key executives make it clear that misconduct within the FTX organization was not isolated to a few bad actors. Instead, it points to systemic issues that raise questions about companies’ governance and ethical conduct in the rapidly growing cryptocurrency market.

The FTX case is far from done, and Salame’s plea adds more confusion and drama to the proceedings. Moreover, the case’s impact on the crypto industry remains uncertain as it continues to reverberate. However, it has set a precedent that will likely guide future legal actions and regulatory oversight in the crypto world.

As cryptocurrency matures and gains increased mainstream acceptance, the need for stringent compliance and ethical conduct becomes urgent.

Whether Salame’s plea will serve as a cautionary tale for the industry or simply as a footnote in its complex history is something time will tell.

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