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Fourth top FTX executive pleads guilty ahead of Sam Bankman-Fried trial

NEW YORK – Ryan Salame, a former top executive at cryptocurrency exchange FTX, pleaded guilty on Thursday to criminal charges linked to the sweeping fraud case against FTX’s founder, Sam Bankman-Fried, a move that raises the pressure on Bankman-Fried ahead of his trial in October.

In a federal courtroom in Manhattan, Salame pleaded guilty to a campaign finance law violation and a charge of operating an unlicensed money transmitting business.

Salame said he had made millions in political contributions at the direction of Bankman-Fried.

The contributions were labelled loans from FTX’s sister company, the crypto hedge fund Alameda Research.

“I understood that the loans would eventually be forgiven and that I would never have to repay them,” Salame said.

Salame, who appeared in court in a blue suit, a striped tie and blue socks designed with orange Bitcoin logos, will pay a US$6 million (S$8.2 million) fine and more than US$5 million in restitution to FTX, and will forfeit two properties in Massachusetts, along with a Porsche car.

He could be sentenced to up to 10 years in a federal prison.

Salame, 30, who ran FTX’s subsidiary in the Bahamas and was a prolific donor to Republican politicians, is the fourth executive in Bankman-Fried’s circle of close advisers to admit to criminal conduct since FTX collapsed in November.

Three others – Nishad Singh, Caroline Ellison and Gary Wang – have already pleaded guilty to fraud charges and agreed to cooperate against Bankman-Fried.

FTX filed for bankruptcy in 2022 in a stunning collapse that has become a symbol of crypto industry hubris.

With the help of Salame, Bankman-Fried had turned FTX into a household name, endorsed by celebrities and politicians.

Then the company imploded over a few days, and customers lost more than US$8 billion in deposits.

Bankman-Fried, 31, was arrested in December and charged with seven criminal counts, including wire fraud and securities fraud.

He is accused of using billions of dollars in FTX’s customer funds to finance lavish real estate purchases, political donations and investments in other companies.

He has pleaded not guilty, and his trial is scheduled to begin on Oct 3.

In August, Bankman-Fried’s bail was revoked, and he was sent to jail after a judge ruled that he had twice tried to interfere with witnesses in the case.

Mr Damian Williams, the US attorney for the Southern District of New York, said Salame’s illegal campaign contributions had been part of an unlawful political influence campaign that “helped FTX grow faster and larger by operating outside of the law”.

Salame also took part in a scheme that enabled FTX to take money from US customers through accounts that Alameda had with a few United States banks, according to the charging document.

The accounts were opened as trading accounts and were not approved to accept deposits from crypto customers. NYTIMES

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