FTX $14.5 Billion Repayments May Affect Crypto Markets as Former Co-CEO Ryan Salame Asks for 18 Months Sentence
- FTX repayments could push the crypto markets in a positive direction.
- Ryan Salame is facing a maximum of 10 years in prison and is appealing to have this significantly reduced.
- FTX creditors are being repaid in cash equivalents, not crypto, which remains contentious.
The forthcoming repayments to FTX creditors could be a bullish signal for the overall crypto market. With $14.5 billion set to be repaid, the payouts may create a fresh wave of buying pressure.
As the FTX bankruptcy saga unfolds, the lawyers representing former co-CEO of FTX Digital Markets, Ryan Salame, have appealed to have his sentence capped at 18 months.
FTX Repayments Bullish for Crypto?
According to analysis from K33 Research, the upcoming repayments to FTX creditors may fuel a “bullish overhang for the market.
As per the report, FTX‘s minimum repayments of $14.5 billion to creditors could trigger significant buying activity in the market. The surge could counteract negative effects resulting from other crypto-based reimbursement efforts with Mt. Gox and Gemini, who are repaying almost $11 billion to creditors.
According to K33, the timing of these reimbursements is a major factor that will determine how they affect the market, should they have any effect at all. Unfortunately, the timeline for repayments is unknown, though they are anticipated to begin rolling out later this year.
In the views of K33, a staggered release could result in an unremarkable summer, followed by a potentially explosive performance at the end of the year.
A Slimmer Sentence
As per a May 14, 2024, sentence memorandum filed with the U.S. District Court for the Southern District of New York, and reported by Inner City Press, Salame’s legal team is seeking a lenient 18-month sentence for the former FTX exec.
Salame pleaded guilty in September 2024 to criminal charges related to the FTX catastrophe, this included conspiracy to defraud the Federal Elections Committee. As part of his plea deal, Salame agreed to cooperate with U.S. authorities alongside other FTX and Alameda Research colleagues.
Paying a $6 million fine to the U.S. government and a further $5 million to FTX debtors, as well as losing two homes and a luxury car. Salame still faced charges that would land him up to ten years in jail.
Salame, an FTX Victim?
Salame’s legal counsel argues that Salame was completely in the dark about the conspiracy taking place behind doors at FTX and Alameda, writing:
“He had absolutely no knowledge that the four people at the center of Alameda and FTX had conspired to lie and to steal from their customers. Ryan stole from no one. He did not lie to customers,”
They say he “was duped” and that upon realizing that FTX was embroiled in a gigantic fraud, Salame was the person to inform authorities in The Bahamas in November 2022. This was just two days before Sam-Bankman Fried (SBF) stepped down and the exchange filed for bankruptcy.
Notably, Salame’s lawyers refer to Caroline Ellison’s testimony at the SBF trial, in which Ellison claimed SBF had conspired to keep Salame “in the dark about their fraud, misleading him just as they have misled the rest of the world.”
The FTX Fallout
Evidently, the fallout of FTX is still bearing down on a crypto market that has only just recovered from the lows of 2022/2023. But, K33’s optimistic outlook may quash dissenting voices who are still concerned with FTX’s reimbursement proposal.
Most of the criticism derives from the payments being made in fiat instead of simply returning their original crypto assets, which neglects potential gains accrued over that time.
Whilst SBF faced up to 110 years for his crimes, he still managed to get away with a 25-year sentence. Ryan Salame, who is scheduled to be sentenced on May 28, 2024, is facing a maximum of ten years.
