In a development that could almost be described as surprising if we had not all been watching this saga descend like a slow motion financial car crash, former FTX executive Ryan Salame has been sentenced to seven and a half years in prison for his role in what federal prosecutors might generously term a “disaster in corporate governance” and less generously a “textbook case of what not to do with a cryptocurrency exchange.”
Salame, once co-CEO of FTX’s Bahamian subsidiary and an early confidant of the now-jailed crypto wunderkind Sam Bankman-Fried, pleaded guilty back in September to charges of conspiracy to make unlawful political contributions and conspiracy to operate an unlicensed money transmitting business. This was part of what prosecutors allege was a coordinated effort to funnel tens of millions of dollars into political races with the sort of subtlety usually associated with rhinoceroses in ballet slippers.
In court, Salame expressed remorse for what he called “grave mistakes” and, in what can only be described as an act of radical understatement, admitted that his actions had helped “perpetuate a culture of violation of federal laws” at FTX. Apparently, this culture thrived under the affectionate eye of executives who were just trying to reinvent money while possibly also reinventing the definition of financial ethics.
The sentence, handed down by Judge Lewis Kaplan, was notably more severe than the five to seven years prosecutors had recommended, suggesting that the judge was not overly sympathetic to what he described as Salame’s generous use of fraud to gain political influence. He was also ordered to forfeit over $6 million and pay $5 million in restitution, which feels like a rather pointed reminder that in crypto, losing your shirt can turn out to be more literal than you expected.
Salame is now the first among Bankman-Fried’s inner orbit to be sentenced, although others, such as Caroline Ellison and Nishad Singh, who cooperated more extensively with authorities, are expected to have their days in court with sentences that may lean more toward polite sternness than downright wrath.
Still, Salame did apparently show a flair for transparency in the final chapters. In a letter to the judge, he expressed regret and a hope to make amends. He also mentioned a desire to eventually return to public service, presumably this time with less crypto and more credibility.
A meteoric rise, a spectacular fall, and now seven and a half years to think about it without Wi-Fi.