Casey Wagner

Former FTX exec Ryan Salame has pleaded guilty to charges related to his role at the failed crypto exchange.&nbsp;



<a href="https://blockworks.co/tag/ryan-salame">Salame</a> appeared in court Thursday to plead guilty to charges of conspiracy to defraud the Federal Elections Committee and operating an unlicensed money transmitting business. The combined charges carry a maximum of ten years in prison.&nbsp;



“Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law,” US Attorney <a href="https://blockworks.co/tag/damian-williams">Damian Williams</a> said in a statement. “Today’s guilty plea reflects the commitment I made in December that my Office would continue to pursue swift justice against individuals at FTX and its affiliates who engaged in criminal conduct.”&nbsp;



Salame entered his guilty plea in Manhattan Thursday afternoon, weeks before former CEO Sam Bankman-Fried is set to stand trial on Oct. 2.&nbsp;



As part of his plea, Salame admitted to making $10 million in political contributions and falsely labeling them “loans.” He noted that <a href="https://blockworks.co/tag/sam-bankman-fried">Bankman-Fried</a> endorsed this action.&nbsp;&nbsp;



Salame’s plea marks the fourth former <a href="https://blockworks.co/tag/ftx">FTX</a> executive to opt for a guilty plea over a jury trial. Caroline Ellison, former FTX CEO, pleaded guilty to seven offenses, including charges of money laundering and wire fraud.&nbsp;



Bankman-Fried’s co-founder Gary Wang was the first to enter a guilty plea. In December, Wang pleaded guilty to four counts, including wire fraud and conspiracy to commit money laundering.&nbsp;



Nishad Singh, another co-founder, pleaded guilty to five charges, including securities and wire fraud, in February. He is scheduled to be sentenced on Nov.13.&nbsp;



Ellison, Wang and Salame do not yet have sentencing hearings scheduled.



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Former FTX exec Ryan Salame pleads guilty weeks before Bankman-Fried’s trial

It’s no secret Sam Bankman-Fried shelled out millions to Democratic causes.&nbsp;



But it turns out a fellow top executive — Ryan Salame, the former co-head of FTX’s derivatives business and FTX <a href="https://blockworks.co/news/ftx-execs-user-funds-alameda" target="_blank" rel="noreferrer noopener">whistleblower</a> — was backing Republicans and conservative PACs in a big way.&nbsp;



Meanwhile, some of the donations from SBF himself may not have been properly <a href="https://www.citizensforethics.org/wp-content/uploads/2022/12/SBF-FEC-Complaint-FINAL.pdf" target="_blank" rel="noreferrer noopener">disclosed</a>, according to Bankman-Fried’s own telling.



There is no knowing how much he gave under the table. The now-disgraced FTX founder has admitted he kept significant sums to Republicans under wraps.&nbsp;



“I donated about the same amount to both parties,” Bankman-Fried <a href="https://www.youtube.com/watch?t=782&amp;v=6DezodR9hNI&amp;feature=youtu.be" target="_blank" rel="noreferrer noopener">told</a> <a href="https://twitter.com/TiffanyFong_" target="_blank" rel="noreferrer noopener">Tiffany Fong</a>, a YouTube influencer, before his <a href="https://blockworks.co/news/sam-bankman-fried-arrested-in-bahamas" target="_blank" rel="noreferrer noopener">arrest</a> in the Bahamas. “All my Republican donations were dark.”



His rationale, Bankman-Fried told Fong, had nothing to do with regulatory scrutiny. It was, instead, all about protecting his now-tarnished — but once pristine — public image.&nbsp;



“Reporters freak the f— out if you donate to Republicans,” he said during the interview. “They’re all super liberal, and I didn’t want to have that fight.”



<h3 class="wp-block-heading">But Republicans cashed in, too</h3>



At least one executive did not share his concern. Salame, who then held the title of co-chief executive of FTX Digital Markets, made notable personal contributions to GOP campaigns and causes.&nbsp;



Salame alone gave nearly $23 million almost exclusively to Republicans and right-leaning PACs, according to <a href="https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=Ryan+Salame" target="_blank" rel="noreferrer noopener">FEC data</a>.



Salame did not immediately respond to a request for comment.



Bankman-Fried, arrested in the Bahamas, <a href="https://www.justice.gov/opa/pr/ftx-founder-indicted-fraud-money-laundering-and-campaign-finance-offenses" target="_blank" rel="noreferrer noopener">faces federal charges</a>, including money laundering, wire fraud and campaign finance violations.



According to Federal Election Commission (FEC) data, Bankman-Fried personally gave $40 million to various Political Action Committees (PACs) and individual candidates, almost entirely to Democrats.



But FTX US, the American subsidiary of the crypto exchange, donated $500,947.30 between December 2021 and September 2022, according to FEC <a href="https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=FTX" target="_blank" rel="noreferrer noopener">records</a> — the majority to the crypto-focused <a href="https://blockworks.co/news/poll-us-voters-who-own-crypto-are-on-the-rise-just-in-time-for-midterms" target="_blank" rel="noreferrer noopener">GMI PAC</a>, which primarily backed the Republican-aligned Crypto Innovation PAC during the 2022 midterms. Bankman-Fried served as the entity’s chief executive at the time of the donations.&nbsp;



Crypto Innovation PAC, in turn, financed the campaigns of Republicans Michelle Bond — who lost the New York Republican primary for the House of Representatives in 2022 — and Rep. Markwayne Mullin of Oklahoma, who beat out his competition. The group also donated to Rep. Patrick McHenry, R-N.C., Sen. Ted Budd, R-N.C., and Sen. John Boozman, R-Ark., all of whom won their respective races.&nbsp;



All had been <a href="https://blockworks.co/news/bipartisan-stablecoin-regulation-has-a-slim-chance-of-passing-this-year" target="_blank" rel="noreferrer noopener">vocal</a> crypto advocates. At least back then.&nbsp;



Bond also received at least $400,000 in consulting fees from FTX Digital Markets, according to the candidate’s <a href="https://disclosures-clerk.house.gov/public_disc/financial-pdfs/2022/10049865.pdf" target="_blank" rel="noreferrer noopener">financial disclosure report</a> filed in August. No direct donations from FTX to Bond were reported in <a href="https://www.fec.gov/data/receipts/?committee_id=C00816561&amp;two_year_transaction_period=2022&amp;line_number=F3-11AI&amp;data_type=processed" target="_blank" rel="noreferrer noopener">FEC filings</a>.&nbsp;



Salame was <a href="https://www.nytimes.com/2022/12/17/business/ftx-ryan-salame.html" target="_blank" rel="noreferrer noopener">romantically involved</a> with Bond. Salame was also a top donor to the <a href="https://www.fec.gov/data/committee/C00694323/" target="_blank" rel="noreferrer noopener">WINRED PAC</a>, which raked in over $1 billion and gave more than $300,000 to Bond, according to <a href="https://www.fec.gov/data/receipts/?committee_id=C00816561&amp;two_year_transaction_period=2022&amp;line_number=F3-11AI&amp;data_type=processed" target="_blank" rel="noreferrer noopener">filings</a>.&nbsp;



Bankman-Fried’s personal disclosed donations went a long way toward advancing the recipients’ respective agendas, particularly the Protect our Futures PAC, a liberal initiative that credits $27 million of its total $28.5 million raised to Bankman-Fried himself.&nbsp;



Reps. Lucy McBath, D-Ga., and Jasmine Crockett, D-Texas, were two PAC-supported candidates that went on to win their seats in 2022.



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Not Just Democrats: FTX Exec Gave Tens of Millions to GOP Causes

Shalini Nagarajan

A senior FTX executive blew the whistle on user funds being siphoned to Sam Bankman-Fried&#8217;s trading shop Alameda Research, just days before the firms filed for bankruptcy.



Ryan Salame, co-CEO of FTX Digital Markets, informed regulators on Nov. 9 about illicit transfers to Alameda, <a href="https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MTM1NTM4NQ==&amp;id2=-1" target="_blank" rel="noreferrer noopener">court documents</a> filed Wednesday showed, the same day that Binance pulled out of its proposed rescue deal.



The transfers were made to cover Alameda’s “financial losses,&#8221; Salame said. He added the movements were perverse to FTX’s ordinary course of action and may constitute misappropriation, theft, fraud or some other crime.



Only three people had the required passwords to transfer user funds to Alameda, Salame said: Former CEO Bankman-Fried, director of engineering Nishad Singh and chief technology officer Gary Wang, the latter serving the same role at Alameda.



FTX Digital Markets <a href="https://blockworks.co/news/ftx-bahamas-unit-filed-bankruptcy" target="_blank" rel="noreferrer noopener">filed for bankruptcy</a> in the Bahamas about one week after more than 100 affiliated companies <a href="https://blockworks.co/news/ftx-bankrupt-hacked-investigated-a-timeline-of-events" target="_blank" rel="noreferrer noopener">did the same</a> in the US. Singh and Wang&#8217;s roles were quickly <a href="https://www.wsj.com/articles/bankrupt-ftx-fires-three-of-sam-bankman-frieds-top-deputies-11668825607" target="_blank" rel="noreferrer noopener">terminated</a>. 



Both former executives were on the Bahamas luxury island of New Providence as of Nov. 9 and mostly resided in 600-acre luxury resort Albany, according to the court document.&nbsp;



Bankman-Fried and Alameda CEO Caroline Ellison also resided in Albany, <a href="https://www.straitstimes.com/business/caroline-ellison-was-a-little-known-crypto-trader-until-ftx-collapsed" target="_blank" rel="noreferrer noopener">reportedly</a> living together in a five-bedroom penthouse suite with eight others.



Salame himself joined FTX Digital Markets, the firm operating FTX&#8217;s flagship Bahamas-based trading platform, in September 2021. He <a href="https://www.theblock.co/post/186400/ftx-digital-markets-co-ceo-staying-on-lawyering-up-sources" target="_blank" rel="noreferrer noopener">reportedly</a> ran Alameda&#8217;s over-the-counter desk for two years before taking on the co-CEO role at FTX, and is said to have plans to stay and help pick up the pieces.



Salame’s information prompted Christina Rolle, executive director of the Bahamas securities commission, to request local police investigate. He didn’t return Blockworks’ request for comment by press time.



Bankman-Fried is so far the only FTX insider arrested, with US authorities charging the former crypto billionaire a <a href="https://blockworks.co/news/no-bail-for-bankman-fried-leaves-bahamas-court-in-handcuffs" target="_blank" rel="noreferrer noopener">fraud-heavy eight count</a> indictment on Tuesday, alongside <a href="https://blockworks.co/news/sec-charges-sam-bankman-fried-with-defrauding-investors" target="_blank" rel="noreferrer noopener">separate</a> SEC charges.



Ellison has hired her own legal defense, which includes a <a href="https://blockworks.co/news/alamedas-ellison-hires-ex-sec-lawyer-who-charged-musk-holmes" target="_blank" rel="noreferrer noopener">former top SEC lawyer</a> who brought cases against Ripple Labs, Elon Musk and Theranos fraudster Elizabeth Holmes.



<h3 class="wp-block-heading">FTX may have siphoned $10 billion in user funds to Alameda</h3>



Recent court filings separately showed Bahamas regulators exchanging emails with Bankman-Fried prior to FTX’s bankruptcy. He was asked to meet with the local securities commission to discuss the platform’s solvency and Binance’s potential rescue deal.



In one email addressed to Bahamian lawyer Ryan Pinder, Bankman-Fried apologized for delays in his responses, claiming he was focused only on “making customers whole.”&nbsp;



“We are investigating a more thorough answer to this question; we did not intend to, but are concerned that poor risk management will lead to a liquidity issue,” Bankman-Fried said.



FTX reportedly <a href="https://blockworks.co/news/ftx-lost-up-to-2b-in-user-funds-10b-sent-to-alameda-report" target="_blank" rel="noreferrer noopener">moved some $10 billion</a> in client funds to Alameda over the years, and between $1 billion and $2 billion of those funds are unaccounted for.&nbsp;



Reuters <a href="https://www.reuters.com/technology/ftxs-bankman-fried-begged-rescue-even-he-revealed-huge-holes-firms-books-2022-11-16/" target="_blank" rel="noreferrer noopener">reported</a> FTX co-founder Wang had built a “backdoor” into the exchange’s book-keeping software, per the outlet’s sources, which let Alameda withdraw FTX user funds without setting off internal systems.&nbsp;



Bankman-Fried, who was <a href="https://blockworks.co/news/sam-bankman-fried-arrested-in-bahamas" target="_blank" rel="noreferrer noopener">arrested in the Bahamas</a> on Monday and faces potential US extradition, has repeatedly denied any wrongdoing and claimed he <a href="https://blockworks.co/news/bankman-fried-underestimated-collapse" target="_blank" rel="noreferrer noopener">never intended to commingle</a> user funds, instead blaming mislabelled bank-related accounts.



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