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FTX Sentencing Expectations: Comparing the Penalties for Ryan Salame, Caroline Ellison, and Other Executives

Last Updated May 29, 2024 11:01 AM
Giuseppe Ciccomascolo
Last Updated May 29, 2024 11:01 AM
Key Takeaways
  • Ryan Salame, a former FTX executive, has been sentenced to prison for his role in the company’s collapse.
  • The sentence is longer than what prosecutors and his defense team requested.
  • Salame is the first FTX executive to face sentencing, with others expected to receive harsher sentences.

The ongoing saga of FTX’s spectacular collapse in 2022 takes another turn as Ryan Salame, a former high-ranking executive, receives a harsher sentence  than his lawyers anticipated. Prosecutors also requested a minor sentence for the manager.

But Salame is not the only famous FTX representative who ended up before the court. Caroline Ellison, Gary Wang, and Nishad Singh still await to know their fate after they pleaded guilty to several charges.

Ryan Salame Gets Higher-Than Expected Sentence

Ryan Salame was one of four former high-ranking FTX managers to plead guilty to federal criminal charges following the company’s collapse in late 2022. Alongside Caroline Ellison, Nishad Singh, and Gary Wang, Salame faced charges but did not agree to testify against Sam Bankman-Fried, FTX’s founder and former chief executive, sentenced to 25 years in prison in March this year.

Salame joined FTX’s affiliated hedge fund, Alameda Research, in 2019, before becoming co-chief executive of FTX’s Bahamian affiliate. He acted as a straw donor, facilitating over $100 million in contributions to US political campaigns, mainly ahead of the 2022 midterm elections. These donations aimed to help SBF gain political favor and were funded by transfers from an Alameda subsidiary, which Salame admitted he never intended to repay.

Prosecutors, who sought a seven-year sentence for Salame, described the campaign finance offense – comprising more than 300 individual political donations – as one of the largest in American history.

His lawyers, who advocated for a sentence of no more than 18 months, argued that the discovery in November 2022 of FTX’s misappropriation of billions was as shocking to Salame as it was to the public, emphasizing that he was not part of Bankman-Fried’s closest circle.

Damian Williams, the US attorney in Manhattan who brought the case, stated  that Salame’s crimes helped FTX grow by operating outside the law and undermined public trust in American elections and the financial system’s integrity.

Ellison Awaits Her Fate

During the sentencing of FTX founder Sam Bankman-Fried to 25 years in prison, Judge Lewis Kaplan emphasized the impactful testimony of former FTX executive Caroline Ellison, who was also Bankman-Fried’s girlfriend.

Ellison played a crucial role as a witness for the Department of Justice in its case against Bankman-Fried. After agreeing to a plea deal in December 2022, a month following FTX’s bankruptcy declaration, she provided essential evidence during the criminal trial. Her contributions included text messages, documents, and confidential recordings, which were instrumental in securing a guilty verdict against Bankman-Fried on all seven charges.

As the head of FTX’s sister hedge fund, Alameda Research, Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.

Although Ellison faces sentencing guidelines similar to Bankman-Fried, she may receive a more lenient sentence due to her cooperation as a witness. However, no legal expert or insider has predicted the exact length of her sentence.

No Certain Expectations For Other FTX Executives

Ellison and Salame are not the only notable FTX figures who have faced legal consequences. FTX co-founder Gary Wang and former engineering chief Nishad Singh also pleaded guilty to various criminal charges and cooperated with the government’s prosecution of Bankman-Fried.

Gary Wang, 30, described himself as a coder during his testimony. He admitted that he and his colleagues modified the code to allow Alameda Research to withdraw funds from FTX customers without their knowledge. Prosecutors may recommend leniency for Wang due to his cooperation, according to Eric Chaffee , a law professor and director of the Financial Integrity Institute at Case Western Reserve University. However, Chaffee noted that due to the high-profile nature of the case, Wang is still likely to face significant jail time.

Nishad Singh, a graduate of the University of California, Berkeley, started his career at Facebook before joining Alameda Research in 2017. He became FTX‘s chief engineer and played a crucial role in the financial fraud. Like Wang, Singh cooperated with prosecutors. He testified that Bankman-Fried instructed him to write code enabling Alameda to borrow billions of dollars from FTX.

Although Singh admitted to defrauding customers and participating in money laundering, he insisted he did not steal money. He testified that he lost faith in Bankman-Fried and wanted to resign but felt his departure could harm the company.

Singh, 27, who has pleaded guilty to five charges, revealed during his testimony that he considered suicide following the collapse of FTX.

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