In a significant blow to the crypto world, former FTX Digital Markets co-CEO Ryan Salame has been sentenced to 7.5 years in prison after pleading guilty to two felony charges. This decision was handed down by Judge Lewis Kaplan in the U.S. District Court for the Southern District of New York on May 28.

Salame's crimes included conspiracy to operate an unlicensed money-transmitting business and engaging in campaign finance fraud. His plea in September 2023 set the stage for a highly anticipated sentencing.

“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,” stated U.S. Attorney Damian Williams. He emphasized that Salame’s actions eroded public trust in American elections and the integrity of the financial system, highlighting the severe consequences of such misconduct.

Salame's report of FTX’s fraudulent activities to the Securities Commission of the Bahamas on November 9, 2022, came just days before CEO Sam Bankman-Fried resigned and FTX filed for bankruptcy. Bankman-Fried, later extradited to the U.S., was convicted of seven felonies and sentenced to 25 years in prison in March.

Prosecutors had recommended a seven-year sentence for Salame, citing his misuse of FTX user funds and fraudulent contributions to his girlfriend Michelle Bond’s congressional campaign. Salame’s lawyers argued for an 18-month sentence, claiming he was a minor player in the conspiracies and unlikely to reoffend.

Salame is the second major FTX figure to face sentencing after Bankman-Fried. Former Alameda CEO Caroline Ellison, ex-FTX engineering director Nishad Singh, and FTX co-founder Gary Wang have all pleaded guilty and testified in Bankman-Fried’s trial, though their sentencing dates remain undetermined.

Following his guilty plea and release on a $1 million bond, Salame has been free to travel. However, he now faces significant financial penalties, including $12 million in restitution and the surrender of two properties and a business. Despite his previous multimillion-dollar net worth, Salame’s assets have dwindled, with a court filing indicating he might retain a 2021 Porsche due to insufficient equity for forfeiture.

This high-profile case underscores the ongoing fallout from FTX’s collapse and the serious legal ramifications for those involved in financial fraud and corruption in the cryptocurrency industry.