FTX collapse: a former manager was sentenced to pay a fine of US$1.5 billion

FTX collapse: a former manager was sentenced to pay a fine of US$1.5 billion

The former director of FTX, Ryan Salame pleaded guilty to two criminal offenses related to the financing of political campaigns and capital transfers. Thus he agreed to pay several fines amounting to US$1.5 billion.

Salame pleaded guilty to conspiracy to commit illegal contributions and defraud the Federal Electoral Commission and conspiracy to operate a unlicensed money transfer business. In his deposition, the former co-CEO of FTX Digital Markets admitted that, from fall 2021 to November 2022, he directed tens of millions of dollars of political donations to both Democrats and Republicans in their own name when in reality the money came from Alameda Research, the hedge fund arm of the owner of the cryptocurrency exchange FTX.

According to the former manager, the transfers were made at the request of the then CEO of FTX, Sam Bnakman-Fried. The transfers were “categorized as loans” but “it was understood that they would not be repaid.” Bankman-Fried will stand trial Oct. 3 on charges of wire fraud and securities fraud related to the alleged theft of billions of dollars in funds from FTX clients.

According to the indictment filed against Salame, the former FTX director would have assured in a private message that “the purpose of these bipartisan donations would be to replace the anti-crypto Democrats with the pro-crypto Democrats and the anti-crypto Republicans with the pro-crypto Republicans” and that the donations they would probably be channeled through Salame “to eliminate that Republican side.”

“Ryan Salame agreed to promote the interests of FTX, Alameda Research and their accomplices through a illegal political influence campaign and through an unlicensed money transfer business, which helped FTX grow faster and bigger while operating outside the law,” said US Attorney Damian Williams in a statement.

P8 – FTX_opt.jpeg

umbrella. FTX filed for bankruptcy in a Delaware court.

FTX: the judicial framework

As part of his out-of-court settlement, Salame has been sentenced to pay fines worth more than $1.5 billion. The former FTX executive agreed to pay $6 million before his sentencing. To help cover this amount, Salame has already agreed to give the government a “Porsche car 2021” and multiple properties, including two homes in Massachusetts and the property of the East Rood Farm Corporation, an entity of which Salame is the owner. In the event that Salame pays the 6 million dollars and delivers the various properties within the established deadlines, it will be free from payment of the entire amount, as reported by the Department of Justice (DOJ).

However, Justice stresses that it could claim the entire $1.5 billion if it turns out that Salame lied in his sworn financial statement or otherwise interferes with the Government’s attempt to recover the assets. Additionally, Salame was ordered to pay more than $5.5 million in restitution to FTX’s creditors.

Salame, who was released on $1 million bail, faces 10 years in prison for the charges previously mentioned. Judge Lewis Kaplan has set his sentencing for March 6 in Manhattan District Court.

According to ‘CNBC’ sources, Salame would not be cooperating with federal prosecutors in the case they are preparing against Bankman-Fried and that he will take advantage of the Fifth Amendment to avoid self-incrimination. It should be remembered that others three former FTX executives have pleaded guilty to all charges and are cooperating with the DOJ in the prosecution of Bankman-Fried. These former executives are Caroline Ellison, former CEO of Alameda; Gary Wang, former CTO of FTX; and Nishad Singh, former director of engineering at FTX.

Source: Ambito

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts