NEW YORK, Sept 7 (Reuters) – Ryan Salem, the former co-CEO of FTX’s Bahamian subsidiary and a top lieutenant of bankrupt cryptocurrency exchange founder Sam Bankman-Fried, pleaded guilty on Thursday to illegally amassing millions of dollars. Campaign donations to boost causes supported by his employer.
In court filings Thursday, attorneys for Salem, Bankman-Fried and former FTX Engineering President Nishad Singh used FTX customer funds to donate to political candidates supporting crypto-friendly legislation.
Salame is the fourth former executive from the Bankman-Fried companies to plead guilty. Bankman-Fried is scheduled to go on trial Oct. 3 on charges that he stole billions of dollars in FTX client funds to cover losses at his hedge fund, Alameda Research.
Salami, 30, He pleaded guilty at trial One count of conspiracy to make an illegal political contribution and one count of conspiracy to operate an unlicensed money laundering business before U.S. District Judge Louis Kaplan in Manhattan.
There is no indication that Salameh will cooperate with the prosecution or testify against Bankman-Fried.
Former Alameda CEO Carolyn Ellison, former FTX Chief Technology Officer Gary Wang and former FTX Engineering Chief Nishad Singh have previously pleaded guilty and are slated to testify.
“Ryan is looking forward to putting this episode behind him and moving forward with his life,” Salem’s attorney Jason Linder of the Mayer Brown law firm said in a statement.
Bankman-Fried, 31, previously pleaded not guilty to fraud and conspiracy charges stemming from the November 2022 collapse of FTX.
Prosecutors said Salem told a confidant that Bankman-Fried believed political donations would “weed out” anti-crypto Democratic and Republican lawmakers — meaning defeat them in the election. Salem said his employer would send money through Salem for donations to Republican candidates.
Salem gave more than $24 million to Republican candidates in the 2022 election cycle, making him one of the year’s top donors, according to Federal Election Commission data.
He told the court that the money he used was recorded as a loan from Alamelu, but he did not want to repay it.
“I know that making a contribution in my name with money that I don’t own is prohibited by campaign finance laws,” Salameh said.
Porsche Surrender Salam
Salem joined Alameda in 2019, two years after founding Bankman-Fried, and became co-CEO of FTX’s Bahamian affiliate in late 2021. He worked at Ernst & Young and Circle Internet Financial before joining FTX Digital Markets.
While in Alameda, Salem said FTX customers used the fund’s bank accounts to transfer fiat currency to the exchange, even though neither company was licensed as a money services business by law.
Campaign finance and money laundering schemes “helped FTX grow faster and bigger by operating outside the law,” U.S. Attorney Damian Williams in Manhattan said in a statement Thursday.
As part of his plea deal, Salem agreed to forfeit more than $1.5 billion, although prosecutors will accept his $6 million, two Massachusetts properties, his interest in East Root Farm and a 2021 Porsche to satisfy the judgment.
According to a 2021 report in the Berkshire Eagle, East Root Company owns a restaurant in Lenox, Massachusetts.
Salem will reimburse FTX $5.6 million in its ongoing bankruptcy proceedings.
Salameh was released on $1 million bond and is scheduled to be sentenced on March 6, 2024.
Reporting by Luke Cohen in New York; Editing by Will Dunham, Emilia Sithole-Madaris, Mark Porter, David Gregorio and Leslie Adler
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