Ex-FTX Executive Ryan Salame Could Forfeit $1.5B as Part of Guilty Plea

Salame admitted to being a "straw donor” to secretly funnel millions of dollars to Republican political candidates while Bankman-Fried donated to Democrats.

AccessTimeIconSep 7, 2023 at 7:17 p.m. UTC
Updated Sep 8, 2023 at 4:39 p.m. UTC

NEW YORK — Ryan Salame, a top FTX executive who played a key role in the exchange’s political fundraising operations, could forfeit over $1.5 billion after pleading guilty on Thursday to federal criminal charges tied to the exchange.

Salame, who was co-CEO of FTX's Bahamas entity, FTX Digital Markets, pleaded guilty to conspiracy to make unlawful contributions and defraud the Federal Election Commission, and conspiracy to operate an unlicensed money-transferring business.

“I made political contributions in my name that were funded by transfers from an Alameda subsidiary,” Salame told Judge Lewis Kaplan, who is also overseeing Bankman-Fried's trial, as he entered his guilty plea. Alameda Research was a trading firm established by Bankman-Fried which allegedly invested funds belonging to FTX exchange users.

The Alameda transfers were “categorized as loans,” Salame said, but “it was understood that they would not be repaid.” The donations, according to Salame, “were for the benefit of initiatives introduced by others but supported by Sam Bankman-Fried.”

As part of his plea agreement with the government, Salame could ultimately forfeit more than $1.5 billion dollars. He agreed to hand over $6 million before his sentencing, scheduled for March of next year. To help cover this amount, Salame has already agreed to give the government a “2021 Porsche automobile” and multiple properties, including two Massachusetts homes and ownership of the East Rood Farm Corporation, an entity Salame owns. Based on federal sentencing guidelines, Salame could face up to 10 years in prison.

Should Salame pay the $6 million and turn over the various properties by the set deadlines – referred to as the substitute assets – he will be off the hook for the full amount, a DOJ filing said. "Upon receipt of the payment ... the [U.S.] shall accept the Payment and Substitute Assets in full satisfaction of the Money Judgement," the filing said.

The DOJ could still pursue the full $1.5 billion if it turns out that Salame lied in a financial affidavit or if he otherwise interferes with the government's attempt to deal with the assets, the document said.

Additionally, Salame was ordered to pay more than $5.5 million in restitution to FTX debtors.

According to a different DOJ document, the $1.5 billion Salame will forfeit represents "property involved in" the unlicensed money transmitter charge.

The guilty plea comes less than a month before the trial of Sam Bankman-Fried, the FTX founder, is set to begin. Bankman-Fried, who has pleaded not guilty to all of the charges against him, stands accused of orchestrating a multibillion-dollar fraud that ultimately culminated in FTX’s bankruptcy and the loss of funds for its customers.

Salame, a Republican megadonor, says now that he served as a secret go-between for FTX donations to right-wing politicians and political causes.

“Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law," U.S. Attorney Damian Williams said in a statement.

Salame was arraigned on Thursday at the U.S. Courthouse in the Southern District of New York. Bloomberg first reported that Salame was expected to plead guilty on Thursday morning. After appearing in court clad in a blue suit and wearing socks emblazoned with Bitcoin logos, Salame was released on a $1 million bond with two co-signers.

Other former leaders of the FTX exchange empire – Caroline Ellison, Gary Wang, and Nishad Singh – have already pleaded guilty to criminal charges. All are expected to serve as witnesses for the government’s case against Bankman-Fried, who prosecutors say conducted one of the largest financial crimes in U.S. history. Prosecutors had previously said that Salame intended to plead his Fifth Amendment right against self-incrimination and so wouldn't testify.

Salame’s Role at FTX

In its original indictment against Sam Bankman-Fried, which listed Salame as an unnamed co-conspirator, the U.S. Department of Justice charged Bankman-Fried with using a straw donor scheme to secretly make political donations in violation of campaign finance laws.

As Bankman-Fried publicly branded himself as an ardent supporter of the Democratic party – he made the second-largest single donation to Joe Biden’s 2020 presidential campaign, and he and his family were active in a variety of left-leaning political causes – he allegedly used Salame to covertly court Republicans.

Salame doled out more than $24 million to Republican political candidates during his time at FTX, and he was the 11th largest individual U.S. political donor in 2022 according to OpenSecrets.org. In a court filing last month, prosecutors shared “private messages” from Salame that purport to show him explaining how he was used as a straw donor to secretly funnel money from FTX and Bankman-Fried.

“In a private message to a trusted family member in November 2021, Salame explained that the defendant ‘want[ed] to donate to both democtratic [sic] and republican candidates in the US,’ but the defendant would not do so ‘cause the worlds frankly lost its mind if you dontate [sic] to a democrat no republicans will speak to you and if you donate to a republican then no democrats will speak to you,’” the filing said.

The DOJ dropped its campaign finance charge against Sam Bankman-Fried in July – due to treaty obligations with the Bahamas – but it later clarified that the FTX founder would still be “charged with conducting an illegal campaign finance scheme.” The campaign finance allegations will now be lumped in with wire fraud charges from the original indictment, prosecutors said in a letter addressed to Judge Kaplan.

Separate from the Bankman-Fried case, federal prosecutors are reportedly investigating if Salame and his girlfriend, Michelle Bond, broke campaign finance laws in connection to Bond’s unsuccessful 2022 congressional bid, according to the Wall Street Journal.

Elizabeth Napolitano contributed reporting.

UPDATE (Sept. 7, 2023, 20:20 UTC): Adds additional detail from hearing.

UPDATE (Sept. 7, 2023, 21:05 UTC): Adds detail from DOJ filing.

UPDATE (Sept. 7, 2023, 22:30 UTC): Adds further detail from DOJ filings.

Edited by Danny Nelson and Nikhilesh De.


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