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Disclaimer: This story was originally published on May 22, 2024.

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Federal prosecutors are seeking a five to seven-year prison sentence for Ryan Salame, a former FTX executive, arguing that “just punishment” is necessary for the individual’s role in the cryptocurrency exchange’s massive fraud and campaign finance violations.

In a sentencing memo filed in a Manhattan federal court on May 21, prosecutors argued that Salame’s crimes were significant and warranted a substantial sentence. The unlicensed money-transmitting business allegedly involved more than $1 billion in transactions without proper oversight, while the campaign finance violations were described as some of the largest in American history. Prosecutors wrote:

“Those are serious crimes, and a substantial sentence is required to ensure that Salame receives just punishment […] Would-be violators of the campaign finance laws must understand that these are not minor offenses.”

“The relevant sentencing factors require an aggregate sentence within the range of five to seven years’ imprisonment,” they added.

Salame was a high-ranking member of FTX, a once-prominent crypto exchange that collapsed in 2022 amid allegations of widespread fraud. Salame joined FTX’s sister hedge fund Alameda Research in 2019, after meeting Bankman-Fried at a blockchain conference.

The former executive pleaded guilty in September 2023 to two counts: conspiracy to make unlawful political contributions and defraud the Federal Election Commission, and conspiracy to operate an unlicensed money-transmitting business.

Meanwhile, the exchange’s founder, Sam Bankman-Fried, is currently serving a 25-year prison sentence for his role in the scheme, which defrauded customers, investors, and lenders of billions of dollars.

Salame sentencing may set precedent

The defense team for Salame has requested a much lighter sentence, arguing that their client played a minimal role in the overall fraud and has cooperated with authorities. They have asked for a sentence of no more than 18 months, citing the executive’s cooperation, remorse, and efforts to make amends.

Salame’s sentencing hearing, scheduled for May 28, is poised to be a landmark event in the legal saga surrounding the FTX collapse. He is the first of Bankman-Fried’s close associates to face sentencing, potentially setting a precedent for the punishments yet to be handed down to Caroline Ellison, Nishad Singh, and Gary Wang, all of whom have also pleaded guilty to fraud-related charges.