Ex-FTX Exec Ryan Salame’s $1.6-Billion Guilty Plea Might Actually Be A Bargain For Him
Ryan Salame, a former executive at FTX, has pled guilty to campaign finance and money-transmitting crimes in a New York federal court. As part of his plea agreement, Salame has agreed to forfeit his own properties touted to be worth nearly $1.6 billion. This high-profile case sheds light on a complex web of political contributions and financial transactions.
Salame confessed that from the fall of 2021 to November 2022, he orchestrated the funneling of tens of millions of dollars in political contributions to both Democratic and Republican entities under his name. In reality, these funds originated from Alameda Research, the hedge fund affiliated with the failed cryptocurrency exchange giant, FTX.
Salame also revealed that he carried out these contributions at the direction of then-FTX CEO Sam Bankman-Fried.
Bankman-Fried, currently detained at the Metropolitan Detention Center for breaking his bail conditions, is scheduled to face trial on October 3 on charges related to wire fraud and securities fraud, stemming from allegations of embezzling billions of dollars in customer funds from FTX.
The charging document filed against Salame outlines his involvement in multiple conspiracies aimed at advancing the interests of Bankman-Fried and the cryptocurrency companies he controlled, including FTX.com and Alameda Research. These conspiracies involved operating an unlawful money transmitting business and violating federal election laws.
In a private message to a confidant, Salame explained that the purpose of these donations was to support pro-crypto Democrats and Republicans, ensuring that anti-crypto candidates were excluded from consideration. These funds were often channeled through Salame to achieve these objectives.
READ: SBF Charged With Making Illegal Political Donations
Salame, who was released on a $1 million bond, faces a maximum sentence of 10 years in prison for campaign finance violations and operating an unlicensed money-transmitting business. His sentencing is scheduled for March 6 in U.S. District Court in Manhattan, presided over by Judge Lewis Kaplan.
In addition to the forfeiture, which will be paid to the U.S. government, Salame, aged 30, will pay $5 million to FTX debtors and $6 million in fines to the government.
$1.6 billion?
The price tag seems daunting, representing the amount of property involved in Salame’s offense. However, the number is effectively a “headline number,” given that the debt will be erased in exchange for certain assets: two houses in Lenox, Massachusetts, equity interest in East Rood Farm Corporation, and his 2021 Porsche 911 Turbo S.
Looking closely at the listed assets, the first Lenox property, located in 12 Housatonic Street, was sold in April 2021 for approximately $1.5 million and is currently estimated to be valued at that amount, according to Trulia.com.
The property seems to house a bar named The Olde Heritage Tavern.
The other Lenox property, located in 8 Tucker Street, was sold in December 2022 for $1.25 million, with website Zillow.com putting an estimated home value of around $600,000.
East Rood Farm Corporation is listed as a domestic profit corporation, incorporated just in February 2021. The records list the firm to be located at 74 Rood Hill Road, Sandsfield, Massachusetts, and is sitting on a property estimated to be worth around $430,000, according to website Redfin.com.
Needless to say, the firm could hardly be worth around a billion dollars on paper.
Finally, the 2021 Porsche 911 Turbo S is estimated to be worth around $170,000+, according to website Car And Driver.
All in all, the value of all the assets Salame is willing to relinquish could be no more than $5 million, based on these estimates.
And the most interesting in all these is while the judgment is accepting the assets by Salame, he admits that as a result of his acts, Salame’s properties “cannot be located upon the exercise of due diligence.”
Salame’s attorney, Jason Linder of the law firm Mayer Brown, released a statement saying, “Ryan looks forward to putting this chapter behind him and moving forward with his life.”
It is worth noting that Salame is not cooperating with federal prosecutors in the forthcoming criminal fraud trial of 31-year-old Bankman-Fried. However, three other former executives who previously pleaded guilty in the same court are expected to testify against Bankman-Fried. These individuals include Caroline Ellison, former CEO of Alameda; Gary Wang, former FTX technology chief; and Nishad Singh, former FTX engineering boss.
U.S. Attorney Damien Williams, overseeing the FTX cases, remarked, “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 the law.”
Information for this briefing was found via CNBC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
