Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets.
One of Sam Bankman-Fried’s key lieutenant’s, Ryan Salame, formerly Co-CEO of FTX Digital Markets, received a 7.5 year prison sentence in a court in the Southern District of New York. FTX infamously collapsed in November 2022 when it became clear that it had been using customer funds to fund operations, investments and trading.
Salame’s sentence stands out because it is above the 7 years that prosecutors had called for. The former FTX executive had pleaded guilty and was cooperating with authorities. In the immediate aftermath of the sentence, Salame returned to X.com. He had not posted since the November 2022 collapse of the exchange. In his posts, he announced that he would be ‘going public’ and share new information about the FTX collapse.
Among the most important contributions of Salame’s to FTX was his role as a ‘straw donor’ to US political campaigns. He enabled contributions of more than $100 million, largely ahead of the 2022 midterm elections, to candidates from both major political parties on behalf of Sam Bankman-Fried. The donations were concealed as loans from an Alameda subsidiary. Alameda Research was Sam Bankman-Fried’s hedge fund that collapsed together with FTX in November 2022. According to prosecutors, the donations went to more than 300 individuals.
Ryan Salame’s surprisingly high sentence does not bode well for fellow FTX executives Caroline Ellison, Nishad Singh and Gary Wang. Each of them pleaded guilty and testified against Bankman-Fried. In return they hope for more lenient punishment. But the largest remaining mystery is that surrounding former Alameda Co-CEO Sam Trabucco. Trabucco shared the CEO role of Alameda with Ellison before announcing his resignation and retirement from FTX in August 2022. He had disappeared from the public until re-emerging during the Ryan Salame trial. Trabucco provided a character support letter for the accused.
The fact that no charges against Trabucco, a key FTX operative, have been brought forward so far seems to confirm the assumption held by many that Trabucco reported the fraud at FTX to law enforcement prior to the collapse. In his role at Alameda he should have been party to all internal reporting. His continuing disappearance and lack of mentions during the trials is so far one of the biggest remaining mysteries of the case. The question is now if Ryan Salame will decide to shed more light on this final chapter of the saga.