Top FTX Executive Sentenced to Seven and a Half Years in Prison

Ryan Salame, a top executive at the collapsed cryptocurrency exchange FTX, was sentenced to seven and a half years in prison on Tuesday, making him the first of Sam Bankman-Fried’s circle of advisers at FTX to receive prison time.

Mr. Salame, 30, a trusted lieutenant of Mr. Bankman-Fried, the exchange’s founder, pleaded guilty last year to a campaign finance law violation and a charge of operating an unlicensed money transmitting business. He is one of four top deputies in the FTX empire who have pleaded guilty to crimes since the company imploded in November 2022.

Mr. Salame’s sentence exceeded the five to seven years that prosecutors had recommended. Defense lawyers had asked for 18 months.

Wearing a blue suit and socks emblazoned with the Bitcoin logo, Mr. Salame stood facing Judge Lewis A. Kaplan as the sentence was read aloud in U.S. District Court in Manhattan. Judge Kaplan called Mr. Salame’s crimes “astonishing.”

“The state of our political life in this country is in jeopardy,” he said. “Efforts like that undertaken by Mr. Salame and Bankman-Fried only make matters worse.”

Mr. Salame is set to surrender on Aug. 29. His lawyers requested that he serve his sentence at the federal prison in Cumberland, Md., near his home. Mr. Bankman-Fried is serving a 25-year sentence, after he was convicted of fraud and conspiracy at a trial last year.

Before FTX failed, Mr. Salame was a key figure at the exchange, overseeing its subsidiary in the Bahamas, where the company was based. As FTX grew into a $32 billion business, Mr. Salame spent lavishly. He enjoyed expensive cars and private jets, and bought restaurants in the Berkshires in Massachusetts. He was also a prolific political donor, giving more than $24 million in the 2022 midterm elections, mostly to Republicans.

When FTX imploded, Mr. Salame became a target of federal prosecutors, who searched his home in Maryland. Mr. Bankman-Fried was charged with stealing $8 billion from FTX’s customers and using the money to finance political contributions, venture investments and luxury real estate purchases. Three top FTX executives — Gary Wang, Nishad Singh and Caroline Ellison — pleaded guilty to financial crimes and agreed to cooperate with the government. They all await sentencing.

In September, Mr. Salame also pleaded guilty, admitting that he had acted as an illegal “straw donor” who made political contributions at the direction of Mr. Bankman-Fried to evade federal disclosure requirements. In a sentencing memo, prosecutors called it “one of the largest ever” campaign finance offenses in American history.

As part of his plea deal, Mr. Salame agreed to pay a $6 million fine and more than $5 million in restitution, and to forfeit two properties in Massachusetts, as well as his Porsche.

In the memo, prosecutors argued that Mr. Salame was motivated by a desire for money and influence. Even as FTX crumbled, he withdrew $5 million from the exchange, using the funds to pay off personal expenses and hire a public-relations firm. Hours before the bankruptcy, the prosecutors wrote, Mr. Salame withdrew another $600,000 from his account on FTX’s U.S. platform.

Judge Kaplan invoked those withdrawals at the hearing on Tuesday. “It was me first — I’m getting in the lifeboat first,” he said of Mr. Salame. “To heck with all those customers.”

In their own memo to Judge Kaplan, Mr. Salame’s defense lawyers said he had not been aware that Mr. Bankman-Fried was stealing billions of dollars from customers. That news “was as shocking and dismaying to Ryan Salame as to everyone else in the world,” the lawyers wrote.

They said Mr. Salame’s life had been “decimated” and that FTX’s demise brought “shame and instability” to his family. Mr. Salame is in a long-term relationship with Michelle Bond, a former crypto industry lobbyist who also supported Mr. Bankman-Fried. In November, Ms. Bond gave birth to the couple’s first child, the memo said. Mr. Salame has also begun to grapple with a substance-abuse problem, his lawyers wrote, and is planning to attend law school.

Addressing the court on Tuesday, Jason Linder, a lawyer for Mr. Salame, described his client as “merely a tool” of Mr. Bankman-Fried’s. Unlike Mr. Wang, Mr. Singh and Ms. Ellison, Mr. Salame did not testify against Mr. Bankman-Fried in court last year. But his lawyers said that he had voluntarily produced documents and “offered assistance and cooperation” to the government as it prepared for the trial.

At Tuesday’s hearing, Mr. Linder pointed to rows filled with friends and family members who had accompanied Mr. Salame, including Ms. Bond and Mr. Salame’s mother and aunt.

Before the sentence was announced, Mr. Salame briefly addressed the court, apologizing to FTX’s customers and his family. “Mom, I can’t imagine how this feels for you,” he said, his voice breaking.

But Judge Kaplan said a long sentence was necessary to send a message to wealthy people about “the consequences of perverting our electoral system and its rules.”

Mr. Salame “knowingly and willfully assisted in destroying the limited transparency that the laws of the United States provide in this area,” he said.